Whether you should rent or buy your next home is a debate on many people’s minds. Multiple factors go into the choice to buy or to continue renting, but we at Neal firmly believe that buying is within reach for most families.
There are some situations in which renting may be better for you (particularly if you’re experiencing job instability or are unsure of the city you’d like to be in a year from now), but in many circumstances, buying a home is more realistic than many people think. It used to be believed that you needed to stay in a home for a minimum of five years in order to break even on your purchase (including closing costs), but more recent estimates shorten that time period to just under two years as the national average in 2016.
If you’re debating if it’s time for you to purchase your first home, we have five reasons that may help you make the choice.
When you pay rent, you don’t own anything, and that money is something you’ll never see a return on. But when you purchase your home, you increase your ownership with every mortgage payment. You can also have the opportunity to refinance your home for lower monthly payments (while rent costs often increase year after year) and borrow against your equity in the home to pay for large purchases in the future — things you can’t do when you’re renting.
Owning a home is an investment, and one that is more tangible than investing in stocks. For one, you can enjoy the benefits of living in a home every day and appreciating the lifestyle it affords. But there are significant financial benefits as well. When you purchase a home, any appreciation is calculated on the overall cost of the home (not just the amount you’ve already paid off) and you aren’t taxed on that appreciation the way you are with stock investments.
As a homeowner, you can deduct mortgage interest and property taxes when you file your tax return every year. There are also deductions you can make for utilities and your home office if you work from home. And when those deductions are calculated to reflect how much you could be saving monthly on taxes, it often makes owning a home the same as, or even cheaper than, renting.
Paint the walls any color you want, plant flowers in your yard, put up new light fixtures — the sky’s the limit when you own your property. With no landlord to go to for permission, you have full creative control over your property. Some neighborhoods may have homeowners associations and certain rules about the outside appearance of your home, but even these provide more freedom than a landlord. Plus, many home improvements can increase the value of your property down the road.
Just like you have more creative control over the property, you also have more say in how you approach home maintenance. You can take care of repairs yourself or search for your own contractor to work with. This freedom lets you find people you trust to do important maintenance on your property, and allows you to have more control over any replacement materials you may need.
Regardless of your age, home ownership is often a more attainable goal than you may realize. There are a number of online calculators that help you determine what you could afford based on your income and any current debts, and many builders offer homes at various price points.
At Neal, we believe in making home ownership a reality for everyone. To help make your buying dreams a reality, we also offer financing through Neal Communities Funding. Our homes in southwest Florida range from villas and cottages, perfect for those just starting their buying journey or looking to downsize, to homes with four or more bedrooms and three-car garages for growing families.
Contact a new home specialist online or call (800)720-4429 for more information about financing, or for home buying advice tailored to you and your needs. And in the meantime, view the areas and communities we build in.
