A friend of mine once told me this, “If you can afford rent every month, you can afford paying for a house”. He was right. If you live in an apartment and pay rent every month, you can definitely afford paying your monthly mortgage on a house.
In this article we will show you top 13 reasons you need to buy a house.
Table of Contents
- You can afford your rent every month
- You can take advantage of appreciation
- You lose money by paying rent
- You save money through interest tax deductibles
- Pay no tax on capital gain
- Take advantages of refinancing
- You save money through mortgage interest deductions
- No more deposit fees, application fees and leases
- You get to own all your pets free of charges
- You will have more freedom
- Your noisy neighbors will stay behind
- You will get more room to grow your family
- No more regulations and rules from landlords
1. You can afford your rent every month
Can you remember the time you started paying rent? Maybe 15 years ago. If you were paying $1000 per month, your total payment over the past 15 years is $180,000. That is a lot of money.
My goal is not to remind you that you spent a tot of money. Instead, I want to tell you that if you bought a house back then, you would be close paying it off by now.
From this example, you can see that for the past 15 years you gave away $180,000 and you will never get it back. This money could have used to pay your mortgage which in the end builds equity in your house.
This is a proof that if you can afford to pay rent, you can indeed afford to buy a house
2. You can take advantage of appreciation
Houses do appreciate over time. In our recent article, 4 ways our property makes you money; we have seen that one of the most way you can make money from your house is through appreciation. Appreciation means that your property value increases over time. We covered many other ways you can benefit from buying a house especially if you use it as a rental property. Feel free to read the article for more details.
For example, if you buy a house now for $100,000 and sell it for $150,000 ten years later; we would say that your house appreciated $50,000 over 10 years. In order words, you made 50,000 by just buying and holding your house.
Therefore, this could be a strong reason for your to buy a house.
3. You lose money by paying rent
Every penny you pay on your rent will never be recovered. On the other hand, buying a house keeps some money in your pockets. In other words, the money you pay on your mortgage will sometimes be yours in the future as long as you don’t fail to pay the mortgage.
You are building an equity in your house every month when you pay a mortgage. If you go back to our example, the $180,000 you paid on your rent is long forgotten and will never be yours. What if you bought a house instead of renting? You could have built a $180,000 worthy of equity or close to it by now. Maybe your house could be fully paid off by now.
A take away here is: the money you pay on rent is lost forever. However, the money you pay on your mortgage is going toward building an equity that will be your once your house is fully paid off.
4. You save money through interest tax deductibles
Your first home and vacation home property taxes will be tax deductible for the purpose of income tax. You can read more on the tax information for the first home buyers on IRS website. This is another benefit of owning a home and your are lucky if this is going to be your first home.
5. Pay no tax on capital gain
Every money you make from your investments is called capital gain. For example, you bought an AAPL stock for $20,000 and sold it for $25,000 in the same year. This is a $5000 of profit on your trade. So, your capital gain is $5000 and you will have to pay tax on it.
Going back to our early example, the $50,000 of appreciation from your house is your capital gain. This gain will be tax free as long as you do not sell your house. Selling an investment creates a taxable event. You can get your money out tax free through refinancing.
6. Take advantage of refinancing
This is another powerful tool of owning a house. Should you choose to invest in properties especially rental properties? Refinancing will be your vehicle toward your success.
We can use the same example in this article. Let’s say that you bought your house for $100,000 with $90,000 of mortgage. After 10 years, you only have $20,000 left of mortgage. Also, your property appreciated $50,000 for example. This means that you have $130,000 of equity in your property.
You can take this number to a bank and get another mortgage. You could get a mortgage equal to 80% or more of your equity in the property depending on your situation.
This is one of the good reasons you need to buy a house.
7. You save money through mortgage interest deductions
You could build a shelter against taxes by buying a house. Whenever your mortgage balance is below your property values, the mortgage tax will be deductible on your taxes. You can see that by having a mortgage, you might be able to save money through interest deductions.
8. No more deposit fees, application fees and leases
The first thing you do before moving into an apartment is signing a lease. You also have to pay application fees (not too much but your hard earned money). How about paying a deposit worthy of two months of your rent? All these regulations are there to protect one person. Your landlord.
Buying a house will protect you from all regulations and fees made up by mankind. You will never pay deposits, application fees or signing pages of lease applications. You will have your own kingdom where you make your own rules.
9. You get to own all your pets free of charges
How about paying like $100/month for every pet you own? Your landlords think that your pets do not deserve a space in their complexes. They also think that pets will tear the carpet, mess up walls, etc. Because of these reasons, they charge you a ton of money to discourage you from having pets in their apartment complexes.
You will never have to worry about all these nonsense if you own your own home. You will have as many pets as you want. This could be a great reason for some of you to buy a house.
10. You will have more freedom
Your house is your kingdom. You can invite however you want, do whatever you want, etc. No one will knock on your door telling you what do and how to do it. You are in control of what happens in your home.
11. Your noisy neighbors will stay behind
Living in an apartment is not an easy task. Your landlord gives you rules to follow and your neighbors give you more. If you like to party, they will shut you down. On the other hand, if you like a quiet environment, you neighbors will be agree.
There is one place you can do whatever you want. Where all your problems can be solved. You need a quiet place? You can have it. You wanna go crazy? You can do it. This place is your own home. Your home will protect you from your lousy neighbors. In addition, it will give you a chance to party as much as you want if you are the lousy one.
12. You will get more room to grow your family
Apartments and rental properties are not good when it comes to space. The two bedrooms you have is the maximum you will have in the same apartment. Your space is limited and there is nothing you can about it. You cannot expand it or make it your own.
On the other hand, you could improve your home and make it the way you want. You can read more about pros of owning a family home from this article. If you want more rooms and freedom to expand, you need to buy your own house.
13. No more regulations and rules from landlords
Did you ever get a letter on your door that says,” You are required to shovel the snow on your patio?” What about,” Move your car by this x date and if you fail it will be towed at your expense?”
By owning your own home, you will be able to shovel snow when you feel comfortable. You will not need to move your car because someone ordered you to. This is the freedom that comes with owning your own home.
