Although, we each need, a so - called, place, to, hang - our - hats, and call our home, there are various options, and alternatives, in terms of how one chooses, whether he should, continue renting, or purchase, and own, a house - of - his - own! While, financial considerations, etc, are obvious factors, this article will, emphasize, 5 other, key factors, involved, and related, to why many choose to buy, rather than, rent! Remember, however, that each of us, have certain personal priorities, Mobility asset platform and a comfort zone, which, can, either, be real, or not, and/ or, of - service, or work, against our interests! With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, these five considerations, and, why, they often, make a huge difference, in one's approach, and actions, related to this.
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1. American Dream: Many feel/ believe, owning a home, of one's own, is a key component of the so - called, American Dream, and, want to claim, their part, of that perceived, deal! When, we own, our monthly payments, and costs, although, often, higher, than when we rent, instead of going, to a landlord, etc, build some financial equity, and, for the vast percentage of the public, the value of one's house, is their single - biggest, financial asset!
2. Pride of home ownership: Beware of the dangers, of focusing, and emphasizing, Keeping up with the Joneses! It seems, many want, what is often, referred to, as, bragging - rights, and, having a house, to show - off, even, if, it may, mean, more stress, and less - than, the highest degree of happiness, and satisfaction, in the longer - run, with the purchase! Nevertheless, this pride - of - home - ownership, is, often, a major, significant factor!
3. Equity versus mere - expenses: When, we rent, we gain, no financial gain, from, the years of paying rent, and being a tenant! Although, some may not be equipped, for the responsibilities, etc, of home ownership, many first - time, buyers, focus on potential, equity gains, of their primary asset! However, it is, also, important, to consider, the dangers of trying to market - time, and/ or, flip houses, etc!
4. Tax advantages: There are several tax advantages, associated with owning a house. These include, deducting, mortgage interest - paid, as well as real estate taxes, from one's gross income, in determining, net income, for tax filing purposes, etc.
5. Customizable: When, you rent, you live, in a place, owned, by someone else, and no matter, how - hard, you try to make it, yours, only, when you own, is it possible, to customize, living conditions, and quarters, to meet your personal needs, priorities, perceptions, and/ or, life - situations/ changes.
After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I have seen people, buy a home, for meaningful reasons, and, others, who depended, more, merely, based on emotional considerations! Be prepared, and proceed, wisely!
Since, we don't have a crystal ball, it is impossible to predict, accurately, the future! This is especially true, when, it comes to economic issues, including investment, real estate, interest rates, inflationary pressures, government actions, international factors, etc. What are the ramifications of inflation, recession, interest rates, Federal Reserve Bank decisions, etc? How can one, hedge - his - bet, in order to minimize unnecessary risks, while receiving a quality return, also? There is no simple answer, because so many factors, have significant influences. With, that in mind, this article will attempt to briefly, consider, examine and review potential factors, in order to help readers, have a more - complete understanding of the possibilities.
1) Interest rates: We have experienced a prolonged period of historically - low - interest rates. This has created easy money, because the cost of borrowing is so low. Both individuals and corporations have benefited, at least, in the immediate- term, permitting home buyers to purchase more house, because their monthly charges, are low, due to low mortgage rates. Corporate and government bonds, and banks, have paid low returns. It has stemmed, inflation, and created a rise in home prices, we haven't witnessed, in recent memory. The Federal Reserve Bank has signaled they will be ending this propping - up, and will also raise rates, probably three times, in 2022. What do you think that will cause.
2) Auto loans, consumer loans, borrowing: The auto industry has been, significantly, impacted by supply chain challenges. When rates rise, auto loans and leases, will be more costly.
3) THis pattern began after the Tax Reform legislation, passed at the end of 2017, which created the initial, new, trillion dollars deficits
4) Government spending, caused by the financial suffering and challenges, because of shut downs, etc, because of the pandemic, created trillions more in debt. Unfortunately, debt must be eventually addressed.
5) Perception and attitude: The past couple of years,apparently, created a public perception, plus many fears, with a crippling economic impact.
Either, we begin to plan, effectively, and with common sense and an open - mind, many will be at - risk. Wake up, America, and demand better leadership, service and representation.