There are always the obvious reasons to buy. Whether it is the fact that you own an appreciating asset or the fact that you can possibly rent it out, it is a good idea to own the right real estate. But for various reasons some people won’t pull the trigger. What if I told you that there are other reasons to buy that you may not have thought about? Here are three reasons to buy you may not have thought about:
- You can actually control your major expense: Assuming you get a fixed interest rate mortgage, every month and every year your monthly mortgage payments stay the same. However, rent historically increases, and it is out of your control by how much (unless of course, you are the lucky landlord). In fact L.A. rents have gone up 22% in the last four years according to CoreLogic. When a lease agreement is up, it is a new round of negotiations what the rent will be that year. That means the savings each year you have accumulated by owning can be put towards things you love, like traveling, hobbies, or savings.
- You might not have enough tax write-offs, and this is a big one: Chances are you don’t have very many tax write-offs. Depending on your income bracket, thousands of dollars a year are going to Uncle Sam. Assuming no laws change, you could be eligible to write off the interest on a mortgage up to $1,100,000. This is savings that goes back into your bank account that you wouldn’t receive when renting. Please consult with your tax preparer.
- The lifestyle isn’t much different between renting and owning: Yes, there is a little more of a process between a lease ending and selling your home and you are responsible for the repairs as an owner. But overall the lifestyle on the day- to- day is similar. This is especially true of a condo, where you aren’t responsible for the exterior of the property.
Buying real estate, whether it is to live in or rent out, can be a good investment. It can save and/or make you thousands of dollars over the course of owning the property.
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