It’s a dream that many people have to own real estate. It’s easy to understand why, when you consider that there are many perks included! At the end of the day real estate is an investment that holds true through the challenges that arise over time and provides security and passive income. If you’re on the fence about whether to buy or rent, we will give you the rundown on some of the best reasons to buy, to see if it is a good fit for you!
1.) You don’t have to pay rent.
This one reason is number one on the list for a reason. Leases are a dead-end expense with no return for you, other than a temporary place to live. Renting is great for a “right now” solution, but when considering things long term, ownership is definitely the way to go for most people.
2.) Creates passive income.
The best investments are the ones that can make you money in your sleep. Real estate does exactly that! Unlike something that requires consistent monitoring like stocks, real estate really only requires a lot of work upfront. Purchase once, and prepare for your income flow to increase, even when your eyes are closed
3.) More control over your surroundings.
Have you ever wished you could just rip up that carpet, install a new sink, or change out the fixtures in your home? While sometimes you can work out an agreement with the landlord for minor renovations, when you move out all of your hard work disappears with it! When you own real estate you have more flexibility to create the home of your dreams. Or even play around with ideas in rental units or commercial spaces.
4.) Homes accrue value and can be sold for a higher dollar amount further down the line.
Depending on the market, location, and how much work you have put into the house, most people are able to make more money back when they sell their home. This is especially true in metro areas like Boston when the supply vs demand ratio favors sellers, and people are willing to pay more to live in a certain area that might be closer to their work or school.
5.) Real Estate is a non-cash asset that can be borrowed against.
Refinancing your home can free up money for lots of things. Vacations, medical emergencies, or maybe even financing for your next project! Of course, no one wants to owe more on their house than they’ve paid, but having the option provides for security. A tangible asset will serve a greater purpose than letting that same value of money sitting in the bank.
6.) Home-owners have more input in community decisions.
Time and time again, community decisions are usually made by those with the most investment in the neighborhood. Especially when you purchase and become a member of the Home Owners Association. When you own a home you pay taxes that the city needs to function, and after a few years of this type of commitment, you get to know a lot about the area and where those taxes go. Your opinion carries more weight than someone renting, who may only be around for a short amount of time.
7.) You can transfer property to your children to create generational wealth.
Usually, people want to give their kids as much of a chance for success as they possibly can! Real estate is a great way to do just that, especially if you are the first person in your family to buy a home. Beyond the security of having a place to live it conveys the security of financial independence and understanding of responsibility.
8.) 90% of Millionaires credit real estate as a major contributor to their net wealth.
Tony Robbins, Dave Ramsey, Dottie Herman, and Donald Bren. These are the names of just a few millionaires who have used real estate as a way to become extremely wealthy. These people understand the value of passive income, diversifying your assets, and how to take calculated risks! We all could learn a thing or two from them all.
9.) You can use renovation expenses and depreciation as a tax deduction.
Thankfully, the IRS has accounted for the money you will need to spend renovating your property. This write off keeps the properties in good standing and allows you to purchase properties that might need a little TLC with a promised kickback in the future!
10.) As a landlord, your tenants will pay down your mortgage and other expenses, and leave you money to reinvest.
When you buy a multifamily home, some financing such as FHA loans allow you to account for the rent you predict to receive on the other unit(s) as a part of your predicted income. This could help you secure financing for a larger amount than if you were to attempt to purchase a single-family home.