From Renting to Buying: The True Cost of NOT Buying a Home

Buying a home is a major investment and for some might be a scary one. The cost of maintenance, utilities and property taxes might be increasing in New Jersey, however, recent real estate reports show that buying a home can set one up for a successful financial future. 

Whether you are newlyweds looking for your first place to settle down or starting a new career in a new location, some turn to renting a residence for cheaper monthly costs and less hassle. While it may seem like you are saving money by renting, you are actually spending MORE than you would buying a home. Check out these reasons for the benefits of investing in your own property. 

It’s exclusively yours 

No strings attached. Being a homeowner means you have your own place that is not anyone else’s and can do what you want with the space freely. Whether you want to paint the living room a new color or change the countertops in the kitchen, it’s your call and you don’t have to seek permission from a landlord. When you are renting a home or apartment, you can’t ever have the space be truly yours since personalization has its limitations. Think of owning a home as your own little HGTV project: you can remodel and redecorate for any style or vibe you are looking for your home to convey. 

You can see benefits come tax season 

We all dread the month of April...the 15th to be exact.. But when you own a home, that time of year might not be so unpleasant. When renting a place, you feel as if the burden of taxes is lifted off your shoulder. While that may be true, you will end up paying more for the residence than you would if you owned your own property. When owning a residence, the interest you pay on your mortgage payment is tax-deductible so you could be seeing a higher amount in your tax return. Additionally, homeowners can also look into taking a federal tax reduction for any real estate taxes paid during the year, also resulting in a larger lump sum come tax return time. If your residence you own increases in value over the tax year and you eventually decide to sell for a profit, homeowners can take advantage of a capital gains tax exemption which can result in more money in their wallet. Who knew tax season would be fun? 

Setting yourself up for a successful long-term investment 

As mentioned previously, investing in a home might seem like a scary thought but it doesn’t have to be once you think of the potential return on investment owning your own property can possess. When renting, you are not investing in anything and the money you spend monthly has no investment potential. When buying and owning a home, you can take advantage of low interest rates and also buying a residence in a new and up-and-coming towns. New Jersey towns like Hoboken and Jersey City are booming with business so they might be good places to start your search. 

Ultimately when you are looking at the true cost of not owning a home, you might discover you are missing out on a lot. Before you make this investment, take a look at your budget and what you can afford. Factor in aspects of homeowning like homeowner’s insurance, maintenance and utility costs to name a few so your budget is prepared for anything and you can truly find a place you can call home.