Pros of homeownership
The government gives tax incentives to homeowners! If you are looking to buy a single-family home, town house, or a condominium, there are tax benefits you get for buying and not renting. There are a few benefits you could receive, but the main three are:
-Mortgage interest deduction
You can deduct the interest you pay on your mortgage if your loan is less than a $1 million. This deduction usually helps people the most as most of peoples mortgages is interest.
-Property tax deduction
Another benefit to homeowners is the ability to deduct their property taxes(deduction up to $10,000).
-PMI premiums deduction
For those who are paying less than 20% down and are required to have private mortgage insurance, you could deduct your PMI premiums. These premiums can be deducted if the mortgage was assumed after 2006.
Don’t forget that homes could appreciate! Guess whose profit that is?? YOURS. Enjoy some of it as a tax-free profit when you decide to sell your home for a gain!
Pros of Renting
To many, owning a home means/stands for freedom. To some, mobility for work is now the ultimate form of freedom. Since the government does not incentivize renting, there will be no tax benefits for the leasee. The benefits someone renting has is mobility! If they need to pack and go, it is much easier, rather than putting your house on the market, paying commissions, and depending on the housing market you could be waiting to sell your home for a while. Renters ditch that headache and enjoy a different type of freedom.
The most common reason for people not being homeowners and seeking to rent is not being able to save up enough for a hefty down payment. Sure, there are other ways to get a home with a lower down payment, but enjoy the larger loan. You can still settle into a beautiful home and rent it! You won’t receive any extra tax benefits or the freedom of treating it like it is yours, but you can always find gorgeous homes to rent.
What is the incentive to rent or buy in the market now?
We have been in a solid sellers market for a while now, but we are now reaching some resistance. Prices just keep climbing! A lot of people have taken advantage of the low interest rates, but we are now reaching a point where it is cheaper to rent. Fast- rising home prices have made the cost of purchasing a home almost unbearable in some areas. In my opinion, the tax benefits for owning a home make it worth becoming a homeowner!
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