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home ownership vs renting

Owning VS. Renting

One of the most essential and biggest expenses that we can possibly have in our lives is our Housing costs.

Whether you have a Mortgage or rent a house, a condo or an apartment; this monthly expense can really have a big impact in your life.

When it comes down to a housing decision you as the buyer have to keep in mind that owning a home is a long-term financial commitment that requires you to plan ahead and reflect on where your life is headed, while renting is a short-term commitment with no other financial ties, the general notion people have about renting is of "Throwing away money".

 

For the longest time people have been pursuing the American Dream by owning a piece of property, but the volatile economic factors of our modern globalized markets, in some circumstances have turn the ownership of a property more into a burden than an advantage to the owner.
But while owning and renting each has their advantages and disadvantages, what’s best for you it's going to depend on your lifestyle and circumstances.
In Real Estate Nevada we are showing you some things you should keep in mind as you weigh the benefits of renting versus the benefits of owning a property.

Benefits of Home ownership.

When you own a house you own what is known as real property and the rights that come with it known as "The bundle of legal rights".

These rights include:

Right of Possession.
Right to control the property within the framework of the law.
Right of enjoyment(Use of property in a legal manner)
Right of exclusion (Keep others from entering or using your property)
Right of disposition ( to sell, will, transfer, or otherwise dispose of the property)

Also being a home owner brings you another benefit that you can capitalize on the long run such as:

Equity and Leverage

One of the main benefits of getting a home thru a Mortgage, is the LEVERAGE it brings to the table, allowing an Individual to own a property with somebody else's money.

Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity in your home as it goes up in value.

Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

Property Taxes benefits

The U.S. Tax Code lets you deduct the interest you pay on your mortgage (Mortgage Interest deduction), your property taxes, and some of the costs involved in buying a home.

As the new Tax Reform kicks in with some changes on January 1st. 2018 this will be affecting the tax year 2018 (the taxes you file in 2019), you may be able to deduct sales tax, state and local income tax, and/or property taxes capped at $10,000 only if you itemize deductions. This may not directly affect your 2017 taxes.

The new tax bill also prohibits prepaying 2018 state and local taxes that were not imposed in 2017.

Appreciation

Historically, real estate has had a long-term, stable growth in value. In addition, the number of U.S. households is expected to rise 10 to15 percent over the next decade, creating continued high demand for housing.

Predictability

Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will likely increase.

Stability.

Remaining in one neighborhood for several years allows you and your family time to build and establish long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.

 

Benefits of Renting a house

No Cost on repairs or Maintainance

A definite advantage renters have over homeowners is that they have no maintenance costs or repair bills to pay off.

When you rent a property, your landlord is responsible for all maintenance and repair costs. If an appliance stops working or your roof starts to leak, you do not have any financial responsibility to have these things fixed. Homeowners, on the other hand, are responsible for all of their own repair, maintenance and renovation costs. Depending on what the repair is, these costs can be quite extensive.

One of the biggest hassles of home ownership might be the maintenance and repairing that needs to be done in order to keep the property in good shape. Whether it’s mundane repairs like replacing door locks, fixing toilet leaks, and touch-up painting, or big-ticket items like new roofs, furnaces, or driveways, it all comes out of your pocket.

No Real Estate Taxes

An obvious benefit that renters have over homeowners is that they do not have to pay real estate taxes. Real estate taxes can be a hefty burden for homeowners and vary by county. Although property tax calculations can be complex, they are determined based on the estimated property value of your house. With houses getting larger and larger, property taxes can be a significant financial burden.

Cost of Buying or Selling

Renters don't have a Mortgage, and don't have to come with a hefty Down payment to secure the transaction, also as a renter you don't have to deal with closing cost.

An interest rate on a Mortgage, Closing and Selling costs are some of the most daunting expenses in home ownership probably the largest cost of home ownership.

Whenever you buy or sell a house or any property, various government entities, plus a host of professionals such as realtors, lawyers, appraisers, surveyors, and bankers will be standing in line to get paid.

 

Some final thoughts on Home Ownership

Owning a home can be the ultimate goal when you are ready to settle down in the desired neighborhood and it may be beneficial for citizens over a long period of time as an investment when your property starts building equity.
For many people that are constantly on the move either because of work or adventure issues, renting is definitely the better option for short-term living.
Renting a property can save consumers a considerable amount of money when the circumstances are beneficial. The choice of whether to rent or buy your own home is a personal decision.
Before making a hasty move, review the details and make the financial decision that is right for you and your family.

 

Information Disclaimer

The information provided using this web site is only intended to be general summary information to the public.
It is not intended to take the place of either a Licensed professional in specific fields of expertise, the written law or regulations.

Want to buy a house?

Realtor Cristian Erives, is ready and available for you to give you advice and help you with your real estate needs, so you can make the best decision whenever you are ready to take the step in buying a Home in Las Vegas.


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