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Rent vs. Buy (or Spend vs. Invest)

12/10/2018

How long have you been having this debate with yourself? Should I commit to buying a home or keep renting? It can be daunting to think of taking on a mortgage and the responsibility of being a homeowner. But have you carefully considered the rewards that come with that role? When you think about “Rent vs. Buy”, you should perhaps consider it more accurately as “Spend vs. Invest”. Here are some points to ponder.

Rent is an expense. Period.

Unless you enjoy paying rent every month, you have very few reasons to do it. Every year, the rent goes up, even though no improvements have been made. It’s a “cost of living” increase. The landlord’s mortgage payment hasn’t changed, so what are you funding?

Conversely, when you make a monthly mortgage payment, you realize it’s going toward your purchase. You’re contributing to the bottom line, getting closer each month to owning it outright.

The equity equation

Yes, you’ve heard all about the value of investing in a home. Your parents, friends, co-workers, hair stylist, computer guy, and the significant other of your best friend all want to give you their advice. But you’re the one who is going to take the step. And you’ve lived through a scary time when home values plummeted.

Guess what? That’s history. Home prices have rebounded and people are experiencing new gains in their investment. Those people who held onto their real estate after the bubble burst in 2008 are seeing fresh growth in their equity that surpassed their pre-recession level.

When you buy a new home or townhome now, you can expect its value to increase. The sooner you act, the sooner you can take advantage of equity gains.

The joy of tax deductions

Owning a home affords you tax deductions that aren’t available to renters. You can deduct the mortgage interest you paid in a given year.

When you buy your home, you might pay closing costs in the form of “points” (a percentage of the purchase price). You can deduct the points paid on your income tax.

Property tax is also deductible, up to $10,000. Even if you buy a home in December 2018, you’ll pay the property tax for the coming year in your closing costs.

Do you maintain a home office? If so, you can also claim a percentage of your mortgage, home insurance, and utilities, as long as that space is used exclusively for business purposes.

Wouldn’t it be nice to have more tax deductions to claim on your return?

But what if I want to move?

When you need to move, you have the choice of selling your home, preferably at a price considerably higher than you purchased it for! You could also rent it out and become that landlord who has a steady income from an investment. While the income must be declared on your taxes, you also qualify for even more tax deductions as the owner of rental property. Bear in mind, while you’re earning revenue, your rental property is gaining value.

Buy now. Get up to a $15,000 bonus.

Now is a great time to buy a home. Interest rates are rising, but you can still get a low rate. Home prices are going to keep rising, so the sooner you buy, the better.

Hunter Quinn Homes is making it even more affordable to make the move in the Charleston, SC, area. We’re offering up to $15,000 in bonuses when you buy- and close- on select move-in ready townhomes by December 31, 2018. Choose the way you use the incentive: off the purchase price, toward the down payment and closing costs, adding design options—or a combination.

There’s no question that buying a home is better than renting. The only question is, why are you still waiting? Get in touch now while the bonus is still available!

 

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