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Top 5 Major Reasons Why it is Better to Own Than Rent

Owning a home has great financial benefits.

I am often asked, why should I buy a house? Is it better to buy a home vs renting? In a recent research paper, Homeownership and the American Dream, Laurie S. Goodman and Christopher Mayer of the Urban Land Institute explained:

“Homeownership appears to help borrowers accumulate housing and nonhousing wealth in a variety of ways, with tax advantages, greater financial flexibility due to secured borrowing, built-in ‘default’ savings with mortgage amortization and nominally fixed payments, and the potential to lower home maintenance costs through sweat equity.”

 

1. Housing is typically the one leveraged investment available

When you own your home it allows you to amplify any appreciation on the value of your home by a leverage factor. A 20% down payment results in a leverage factor of five, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10%, your leverage factor is 10.

Example: Let’s assume you purchased a $300,000 home and put down $60,000 (20%). If the house appreciates by $30,000, that is only a 10% increase in value but a 50% increase in equity.

2. You’re paying for housing whether you own or rent

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are baked into the rent payment already – along with a profit margin!!

3. Owning is usually a form of “forced savings”

Studies have shown that homeowners have a net worth that is 44X greater than that of a renter. As a matter of fact, it was recently estimated that a family buying an average priced home this past January could build more than $42,000 in family wealth over the next five years.

4. Owning is a hedge against inflation

House values and rents tend to go up at or higher than the rate of inflation. When you own, your home’s value will protect you from that inflation.

5. There are still substantial tax benefits to owning

We know that the new tax reform bill puts limits on some deductions on certain homes. However, in the research paper referenced above, the authors explain:

“…the mortgage interest deduction is not the main source of these gains; even if it were removed, homeowners would continue to benefit from a lack of taxation of imputed rent and capital gains.”

Bottom Line

These are only my top 5 favorite financial benefits of homeownership but there are even more! From a financial standpoint, if you can achieve homeownership and opt for renting you may be cheating yourself. Owning a home is definitely better than renting if you have the financial ability.

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

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Danielle Gaynor, REALTOR

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

 

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

why should I buy a house?

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, General, Interest Rates, Move-Up Buyers, Other

Americans Rank Real Estate Best Investment for 6 Years Running!

Americans Rank Real Estate Best Investment for 6 Years Running! [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Real estate has outranked stocks/mutual funds, gold, savings accounts/CDs, and bonds as the best long-term investment among Americans for the last 6 years.
  • Stock owners are more positive about real estate than stocks as an investment.
  • Of the 4 listed, real estate is the only investment you can also live in!

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Sellers, Move-Up Buyers

Know What to Expect at Your Home Inspection

Know What to Expect at Your Home Inspection | Simplifying The Market

So you made an offer and it was accepted. Now, your next task is to have the home inspected prior to closing. Agents oftentimes make your offer contingent on a clean home inspection.

This contingency allows you to renegotiate the price you paid for the home, ask the sellers to cover repairs, or in some cases, to walk away. Your agent can advise you on the best course of action once the report is filed.

How to Choose an Inspector

Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. HGTV recommends that you consider the following five areas when choosing the right home inspector for you:

1. Qualifications – find out what’s included in your inspection and if the age or location of your home may warrant specific certifications or specialties.

2. Sample Reports – ask for a sample inspection report so you can review how thoroughly they will be inspecting your dream home. In most cases, the more detailed the report, the better.

3. References – do your homework – ask for phone numbers and names of past clients who you can call to ask about their experiences.

4. Memberships – Not all inspectors belong to a national or state association of home inspectors, and membership in one of these groups should not be the only way to evaluate your choice. Membership in one of these organizations often means that continued training and education are provided.

5. Errors & Omission Insurance – Find out what the liability of the inspector or inspection company is once the inspection is over. The inspector is only human, after all, and it is possible that they might have missed something they should have seen.

Ask your inspector if it’s okay for you to tag along during the inspection. That way they can point out anything that should be addressed or fixed.

Don’t be surprised to see your inspector climbing on the roof or crawling around in the attic and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace and chimney, the foundation, and so much more!

Bottom Line

They say, ‘ignorance is bliss,’ but not when investing your hard-earned money into a home of your own. Work with a professional who you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase.

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, General, Interest Rates, Move-Up Buyers

Before You Look for Your Dream Home: Know What You Want vs. What You Need!

Before You Look for Your Dream Home: Know What You Want vs. What You Need! | Simplifying The Market

In this day and age of being able to shop for anything anywhere, it is really important to know what you’re looking for when you start your home search.

If you’ve been thinking about buying a home of your own for some time now, you’ve probably come up with a list of things that you’d LOVE to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest, and start looking at the countless homes listed for sale through rose-colored glasses.

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the “man cave” of your dreams be a future renovation project instead of a make-or-break right now?

The first step in your home buying process should be getting pre-approved for your mortgage. This allows you to know your budget before you fall in love with a home that is way outside of it.

The next step is to list all the features of a home that you would like, and to qualify them as follows:

  • “Must-Haves” – if this property does not have these items, then it shouldn’t even be considered (ex: distance from work or family, number of bedrooms/bathrooms).
  • “Should-Haves” – if the property hits all of the ‘must-haves’ and some of the ‘should-haves,’ it stays in contention but does not need to have all of these features.
  • “Absolute-Wish List” – if we find a property in our budget that has all of the ‘must-haves,’ most of the ‘should-haves,’ and ANY of these, it’s the winner!

Bottom Line

Having this list fleshed out before starting your search will save you time and frustration. It also lets your agent know what features are most important to you before they start showing you houses in your desired area.

 

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, General, Move-Up Buyers

Stop Wondering What Your Budget Is & Get Pre-Approved!

Stop Wondering What Your Budget Is & Get Pre-Approved! | Simplifying The Market

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

 

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom