Renting Vs. Buying Real Estate In Columbus OH
Columbus has a fantastic selection of homes both for rental as well as sale. And with record low mortgage interest rates now available, it’s a excellent time to review your finances and cash flow to see if the hefty monthly rent check you’re currently sending your landlord might not be better spent building equity for your future.
Consider the follow points before making a call to engage the services of a Columbus real estate agent.
Taxes. Monthly mortgage payments always include a part for interest and principal on the loan. They also often include parts for taxes and insurance. Federal income tax guidelines allow homeowners to deduct all of your interest and tax payments. This provides significant tax advantages to you.
Most people simply take the standard deduction on their income tax return since it’s quicker to file that way. Taking advantage of the tax breaks that come with owning a home requires you to itemize your deductions instead. Ironically, itemizing your deductions usually saves you money, because you can also deduct many other expenses like donations, or medical and dental costs over 7.5% of your income.
Home ownership sometimes requires upfront costs, like a down payment, earnest money and closing costs. It also requires you to budget money for regular maintenance of the property, as well as the payment of property taxes and homeowner’s insurance. Still, your total monthly cost may be similar to what you’re already paying for rent.
If you are plotting to stay in one place for at least five years, then home ownership is often a better choice. Studies by the Government National Mortgage Association (GNMA, also known as Ginnie Mae) show that, because of tax advantages and inflation, home ownership usually becomes less expensive than renting starting in year three.
With home ownership, you steadily build equity in your property. This equity is an asset that can provide you later with financial security as well as the ability to borrow against it for things like home improvements, college tuition payments for your kids, or even for the down payment for your next home. Over time, as the interest part of your loan payments decrease, the principal part increases. Since the principal becomes your equity, this means that your asset grows more quickly over time.
Sometimes, if your lifestyle is in transition or you just do not have the time to maintain a property, renting is a better option for you. But, home ownership provides some intangible benefits that renting can’t. The ancient saying, “A man’s home is his castle” is only right if, like a King, he doesn’t have to question anyone for permission to make changes or improvements in the property. Home ownership provides a freedom of expression and feeling of security that isn’t possible through renting. You are in control of your living situation, not someone else like a landlord.
Finally, for many people home ownership provides a sense of security and stability. It taps in to the fantastic American Dream of having your own space to delight in and develop. It provides a sense of community and belonging to a neighborhood, because you are tangibly invested in it. Renting just can’t provide this.
About the author: Susanne Novak is a full time real estate agent specializing in helping home owners buy properties at discounted prices. Read her blog to find the best Columbus houses and how to buy Columbus OH Homes for Sale.