What are the benefits of home ownership?
You’ve been renting your home since moving out on your own almost a decade ago. You love the location and you’re comfortable with your abode and neighborhood. After the second rent increase in three years however, you’ve decided it may be a good time to evaluate whether home ownership is right for you.
Buying a home represents the American dream, but takes some effort and planning. Before you even think about house hunting, you’ll need to do some planning. Have you saved enough for a down payment? Do you qualify for a mortgage, or do you first need to clean up your credit?
Once you’re qualified to buy, there’s the whole process of searching for and buying your home, in some cases renovating and updating your home, and then the big move itself. This may sound like lots of work, but most Americans consider it to be well worth the effort.
When you buy a home it’s all yours Although this is obvious, the fact that when you buy a home it’s yours to do what you want with it shouldn’t be overlooked. You don’t need to obtain a landlord’s permission to paint the walls, update the kitchen or make other improvements to the home. Even if the landlord did agree to your ideas for improvement, they’re the ones to benefit from such improvements. The most important aspect of the home being yours is that you’ll never be asked to move again. Buying a home is a solid investment Buying a home is a solid, conservative long-term investment. You can lock in a fixed mortgage for as long as 30 years at an attractive rate. Home ownership is a hedge against inflation as you’ll no longer be subject to rent increases. Payments made on rent are now reducing your mortgage, so you’re building equity and accumulating wealth, not simply paying for the cost of housing. According to this Forbes article, the national median price for homes will likely rise by 4% to 5% by the end of 2017.
The article continues that “within reasonable parameters of economic growth and interest rate movements, home sales should do well over the next decade.” When one considers steady appreciation in home prices over the coming decade, buying a home is viewed favorably compared to investment in other more volatile asset classes. If you do decide to move in the future you can sell and bank your capital gain, or you can hold onto your home and rent it out. Rental homes are in high demand and you can expect high occupancy rates. This is especially true for an area like Whittier which is a reasonable commute to both Los Angeles and Anaheim. At the moment, expenses for interest you pay on your mortgage and property taxes remain tax deductible.
The current tax reform package proposal calls for caps on those deductions, but this only impacts higher priced homes. We’ll continue to track tax reform developments and will update you after any tax reform act has been finalized. You’ll most likely enjoy significant cash flow savings Most home buyers plan to do so as a primary residence and live there for years. Over the term of ownership, home owners can expect to enjoy significantly lower cash outflows than if they had rented. Rent vs. buy calculators can help you determine the cash savings you’ll likely experience if you buy a home. Click here to use Freddie Mac’s rent vs. buy calculator, where you can enter various parameters and scenarios that apply to you. You’ll be impressed with how much you can save by owning your own home. Our Ford Team of professional realtors is here to help you If you’re thinking about taking the plunge in pursuing home ownership in suburban Los Angeles, contact our Ford Team of professional realtors. We’ll help you gain an understanding of the market and advise you on what homes are available that match your preferences and your budget. Why go it alone when you can have an experienced team supporting you?