If your financial situation allows you to choose between renting or buying, consider yourself lucky. Many have no other options available to them besides renting because of unstable finances, lack of steady employment or bad credit. Alternately, the ability to purchase a home means you are making a solid investment that not only provides substantial tax benefits but may appreciate in value as you make improvements and maintain upkeep over the years.
10 Advantages to Purchasing a Home
1. As you make payments on your mortgage, your personal wealth increases, which enhances your ability to obtain just about anything you want on credit.
2. Owning a home and paying mortgage is much cheaper in the long run. For example, let’s say you decide to rent a Las Vegas residential home for $900 a month. Annual rental increases are typically around five percent. Your friend buys a home for $120, 000 and has a monthly mortgage payment of $1100. Guess what? In a little over five years, you will be paying more than your friend. In addition, your friend enjoys tax breaks given to homeowners, which means that in three years, he or she is paying less on the mortgage than you are paying your rent!
3. The stability of house payments under a fixed-rate mortgage gives you peace of mind from knowing exactly what you will be paying each month for the next 30 years. Alternately, landlords can increase rent without warning–and as much as they want, too.
4. Buy a home and you can do whatever you want to it–paint your bedroom walls pink, raise chickens in your backyard, build a screened-in back porch or turn your garage into a man-cave. You can’t do these things when you rent.
5. Owning a home gives you sense of belonging to a community and a place to settle your family. Kids can attend the same schools until they go to college, you’ll make lifelong friends and the hassle of moving every few years is no longer an issue.
6. You can take advantage of the capital gain exclusion, a tax rule that allows married couples to exclude $500,000 or individuals up to $250,000 of profit. Read more about the capital gain exclusion here.
7. Homeowners can use a home equity loan to pay off debts incurred at high interests. Home equity loans offer lower interest rates and are also deductible. Home improvements, credit card debt, paying for college or starting a business are a few reasons for homeowners taking out a home equity loan.
8. Homeowners can will their house and property to a relative and keep the home in the family.
9. As a homeowner, you don’t have to worry about the landlord suddenly deciding to get out of the rental business and sell the home. Abruptly relocating is never an issue.
10. Paying your mortgage on time year after year can boost your credit score dramatically and keep it above 700.
5 Disadvantages to Buying a Home
1. If you are a “wanderer” and a homeowner, you can’t just move as soon as your lease is up. In addition, selling a home may be a long and frustrating experience.
2. If you encounter serious financial difficulties and fail to make mortgage payments, your house could go into foreclosure and your credit rating will plummet and stay in the basement for at least four or five years.
3. If you don’t carry homeowner’s insurance and your home is damaged by fire, hurricane or other calamity, you’ll still owe the bank but won’t have a home.
4. Homes require constant upkeep and upgrading, from mowing the lawn, replacing the roof and updating the electrical system to repairing burst water pipes or other interior/exterior damage
5. Depending on where you live, property taxes could strain your budget–and they have to be paid every year or they can take your home.
Are There Any Advantages to Renting?
Renting may suitable for people who have jobs that involve a lot of traveling or for those who are physically or mentally unable to perform all the maintenance work a home needs. Also, renting is the only option for those with bad credit who cannot qualify for a home loan.
The Bottom Line–Buying a Home is the Better Option
Buying a home in Las Vegas is definitely in your best interest–for the well-being of your family as well as for your long-term financial outlook. If you are looking for a Las Vegas home for sale, contact a Las Vegas real estate agent today who can help find the kind of home suitable for you and your family’s needs.
Call 702-604-7739 to discuss your home buying plans with a Las Vegas Real Estate Agent Team today.