Benefits of Owning Versus Renting
Thoughts of home ownership can weigh heavily on the minds of renters and other prospective homebuyers. Many renters are apprehensive about the financial responsibility of owning a home, but there are number of benefits available to homeowners that aren’t available to renters.
Here are some benefits of owning over renting. Of course, always seek the advice of a financial professional:
- Deductible property taxes and interest. Although each homeowner’s financial situation is different, most homeowners can deduct property taxes and interest paid on their mortgage for each year of ownership.
- Yearly home appreciation. Homes build equity over time. Renters receive no financial return on monthly rental costs.
- Relatively stable monthly costs. Although homes do cost money to maintain (think: repairs, taxes, insurance), owners are generally not subject to fluctuations in rent.
- Borrowing against equity. Homeowners can borrow against the equity they have built up in their homes. Equity from a home can be used to improve the property, buy a car, or pay for education.
Remember, equity comes from two sources – the increasing ownership you have as you pay down the mortgage over time and any increases in the property value within your neighborhood. If you are fortunate enough to be in an appreciating market, your home may be worth more than you realize.
- Other real estate tax deductions. Multi-family homeowners who live in one unit of a two-family home, for example, and rent out the other unit, can deduct a portion of every improvement to the rental unit and a portion of shared expenses to the whole. (Keep good records and receipts for tax time.)
- Other tax benefits. Although these are city or state dependent, it’s useful to look up tax benefits that might be available to you in your town. For example, in Cambridge, if you qualify, you can apply for a Veteran’s deduction on your city taxes.
Through our affiliated companies and partnerships, Coldwell Banker Residential Brokerage-Huron Ave., provides the convenience of one-stop shopping for all your home-buying needs, including: mortgage acquisition, title insurance, home warranty protection, as well as relocation and concierge services. For more information, please contact me at email@example.com or firstname.lastname@example.org.