In this day and age you may well be asking yourself “What are the advantages of Buying a House, Condo or Property?” There are certainly many advantages of buying a home – both financial, tax wise and most importantly to provide a home and not a temporary dwelling for your family. To a great degree you are in essence “Where you live”.
It is true that you may read in the popular media that a major devaluation in the house market in underway. Look to the long term. Things may go up and down. There may be corrections. However in the long term “They are only making so much land” and “Everyone has to live somewhere”. Consequently over the long term real estate and property prices have always been increasing and have always been a good investment.
If you will notice – rich people seldom are renters. It may be argued that in a rental property the owner takes the hit on repairs and taxes.
It can always be debated as to whether that the mortgage payment s that you make to the bank or finance company are “forced savings” and that you are really not ahead in a financial sense. Whether this is true or not at the end of the day, if you own the property, you will have a substantial asset of worth, whereas if you are a renter, when you close the door, or they carry you out, you will leave with and have accumulated nothing in a financial or financial asset sense.
In addition to the accumulation of financial assets over time when owning property there are additional financial tax advantages to owning property rather than renting. First mortgage interest and real estate property taxes are tax deductible. A penny saved is always a penny earned. Anyone who is paying a mortgage can enjoy these tax benefits for the interest paid on their mortgage as well as property taxes paid. What is important to understand is that in the first few years of your mortgage, most of the money you pay to the bank, credit union or S & L goes towards payment of interest. Not the amount that you owe on the loan (the principal). The financial institution that gave you the mortgage wants to get their piece first. This is not a bad thing for you. Indeed it is in your favor. Your biggest interest charges and hence biggest tax deductions will be in those early years of your mortgage payments. If you understand the rules, as well as follow these rules to the letter – then the mortgage and mortgage tax deduction rules are your favor. You cannot stop the sea and you cannot stop the process of the power of compound interest. In essence someone else will be helping you along the property asset accumulation road as you buy your first home – whether it is starter home, country property or condo and move along the road of home ownership. As you continue to upgrade your home and properties over the years you can be reassured that as long as present rules stay in force – these tax deductions will act greatly in your favor towards your real estate assets and personal worth.