Tag Archives: advantages of home ownership

Real Estate

Why You Should Buy a Home Instead of Renting

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home

I never did like to rent a home, it seems like I was just throwing money out the door every month and paying off the landlords mortgage, plus putting some money in his pocket.

I realize that we had a run up in home prices that put almost everyone out of the market or they bought more house than they could have afforded. Times have changed and there are some really good bargains out there.

The bargains are getting so good in Nevada County, that the lower price homes often have multiple offers.  I’ve placed several offers for clients in homes that were from $200,000 to $500,000 below the original price.  Yes, $500,000 that’s not a typo.  A lot of homes are now selling below replacement costs.  It’s time to buy now, to own your home and not pay off some land lords mortgage.

And finally, a home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you’ll enjoy having something that’s all yours – a home where your own personal style will tell the world who you are.

Real Estate

Should I Walk Away from My House?

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  • walk

    So your house is worth less then you paid for it. Maybe the value has dropped thirty percent or more. Are you thinking of just walking away from it because you feel you are just wasting money?If that seems like a silly question to you, it’s surprising to me how many people are actually saying that to me. When they pose that question, I ask them why they bought a home. Did they buy the home to live in or to make a fast buck?  I can’t seem to get a straight answer other then the value of their home has depreciated.  So here’s what I think:
    History has shown that real estate goes up and down. We are in a down cycle right now. In the 1980’s people were saying the same thing to me. I’m going to bail out of my house, it’s worth less then I paid for it.  Well, houses are worth more now than they were in the 80’s. Prices will increase in the near future. So here are some reasons to stay in your home.

    Pride of Ownership

    This means you can paint the walls any color you like, attach permanent fixtures and decorate according to your taste. Home ownership gives you and your family a sense of stability and security.

    Appreciation

    While this may sound silly with the real estate market decreasing in value at the present in  real   estate has its cycles. Long term it will increase in value, that’s a given. Why do you think so many investors are buying homes now? They realize this is a buying opportunity of a life time. They are there to make money.  Holding on to your house will make you money in the long run in my opinion. If you walk away from your home now, you wouldn’t be able to buy another one for three to five years.  Back to renting and your credit score drops like a rock.

     Mortgage Interest Deductions

    Yes you can deduct the interest on your mortgage.  Home ownership is a superb tax shelter and our tax rates favor homeowners. Interest is the largest component of your mortgage payment. Check with your accountant on this deduction.

    Property Tax Deductions

    IRS Publication 530 contains tax information for first-time home buyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. In California, the passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2% per year or the rate of inflation, whichever is less.

    So my advice to you is, even if your house is worth less then you paid for it, so what, you have a place of your own to live in. Values of real estate will go up and it’s far better to have a place to call your own then it is to rent.