The Advantages And Disadvantages Of Owning A Home
Whether you’re planning to experience luxury living in San Pedro or intend to own studio apartments NYC | The Cole Apartments specifically, it’s time to seriously consider becoming a land contract buyer or real estate owner. Owning property is part of the American dream and there are many advantages you may not even thought about.
On the flipside, there are also potential disadvantages to owning a home as well. We’ll share what are the advantages and disadvantages of owning a home in the following paragraphs.
Advantage: Create A Future Nest Egg
One of the greatest advantages of homeownership is that you’re investing in your future. How so? When you purchase a home, it contains monetary value that can later be turned into cash if you sell your property. You’ll never have this opportunity when renting an apartment because you do not own a tangible asset. On the contrary, you pay rent to your landlord and help him or her pay off his or her mortgage.
Can you see the value in owning your own property? Not only will you own a tangible asset you can sell later on but the odds are good that this asset will appreciate in value over time.
As an example, if you bought a one-family house in the 1980s for $80,000, you could have potentially sold the same house for five times the amount in the early to mid-2000s. Home value appreciated at a rapid pace during this period and many homeowners made a serious score on their property because they bought low and sold high.
Disadvantage: You’re Responsible For Maintaining And Fixing Problems With Your Home
As a tenant, you’ll never be responsible for fixing things that naturally break in a home due to day-to-day usage. As an example, let’s say your kitchen sink suddenly springs a leak and water is shooting out all over the place. Tenants call their landlord and it becomes their problem. Homeowners have to call the plumber and pay them handsomely in order to fix the broken, burst pipe.
Do you see the difference? Sure, you could let your house fall apart if you want to. But that really isn’t a smart way to approach home ownership. So be prepared to pay good money to properly maintain your home and know that problems arise all the time and you’ll need available capital to fix things when they break.
Advantage: Tax Deductions
As a homeowner paying a mortgage, you have the ability to write off the interest and property tax portion when you file your yearly taxes. This is a big deduction that will lower the amount of money you owe to the IRS.
When you rent, you do not have the ability to write off anything since you aren’t paying interest on a mortgage. All the money you spend on housing is advantageous to your landlord but you will not reap any of the benefits during tax time. So, homeownership is a good thing when it comes to big tax write-offs.
All in all, each individual is different and has to determine if homeownership is the right choice or not. If you feel the time is right, put together enough money to make a down payment on a new home, make sure you have all of your ducks in a row financially, and put in a bid on your future dream property.