Rent is f*@&ing expensive! Should you think about buying a house?

So, your landlord just raised your rent again… is now the right time to buy a house? Owning a home is now more affordable than at any time in the last 15 years, but there are a few things to consider:

Benefits of buying:

When you buy a home, you own a portion of the house. If you put down 20% on a house, you own…. 20%. That is called equity. As you pay down your mortgage, your equity (a.k.a. ownership) grows.

Tax benefits: if you own a house, you can write-off the interest you pay on your mortgage for tax purposes. If you make $50K and paid $5K in interest for your mortgage, your taxable income would be $45K ($50K-$5K). This can save you a thousand dollars on your tax bill.

In addition, you can have a yard with a white-picket fence, and no more pothead neighbor playing house music until 4am on a Tuesday.

Benefits of renting:

Mobility: If you’re ADD and move from city to city, then renting is probably for you. Renting gives you the luxury of a short-term lease – when your lease is up, you’re free to move. No strings attached.

No property taxes: Uncle Sam is a greedy bastard… he’s even greedier if you own property. Property taxes can be anywhere from 0.20% – 4% in the US, depending on where you live. When you rent, you don’t have to worry about these extra taxes.

Maintenance: No grass to cut, no driveway to shovel, no roof to fix. Enough said.

Both options can be the right one, depending on your personality and preferences. If you’re up for a little bit (or a lot) of housework, ready to settle in a certain city, and have the funds to put down a 20% deposit, then buying is a great option. If not, rent and reassess next year.

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