Had a question this morning regarding buying vs. renting and thought I would give a few logical reasons for buying a home as opposed to renting one.
1) A home tends to increase in price over times so this is one of the best investments a person can make without too much risk. A home can increase in value 3-6% every year. Even if it didn't appreciate, you could still sell it and recoup some of your expenses, where as if you were renting when you move, your money is gone and you will be lucky to get your deposit back in the end.
2) You'll pay less tax. This is one of the biggest reasons you buy a home. You can deduct the interest you pay on your mortgage from your taxable income, which means you will pay less taxes.
3) Pride of ownership. This has been the American dream since before the dawn of time.
4) Interest rates are still historically low. This makes it less expensive to buy a home. The lower the interest rate the lower your payments and loan will be.
5) Capital Gain Exclusion: You can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains, so long as you have lived in your home for two of the past five years.
6) You'll be able to use the equity in your home for low-cost loans for other purposes. You can access the equity you have accumulated in your home in the form of a home equity loan. You can use this to make improvements, payoff bills etc. Because they are secured, home equity loans usually have a lower interest rate than other types of consumer loans. The interest is usually tax deductible at the end of the year as well.
7) You'll be able to redecorate or renovate whenever you like, without worrying about the color of paint you use or wheather or not you can knock out a wall between to rooms to make one big room. Some improvements will actually increase the value of your property, which is excellent when you go to sell your home.
Example of how much your rent could be buying you;
Monthly rent 3 years 10 years 15 years 30 years
400.00 14,400 48,000 72000 144,000
700.00 25,200 84,000 126,000 252,000
1000.00 36,000 120,000 180,000 360,000
Hope this helps all those who are sitting on the edge trying to decide whether or not to buy. It makes no sense not to buy in this market. It is a buyers market right now and the best time ever to buy a home of your own.