Renting Vs Owning

Ownership gives you a special feeling … and a whole lot more.

The freedom of owning your home is a benefit in itself. Renters have many restrictions that owners do not experience. For example, as an owner you can paint the walls whatever color you like, hammer a nail wherever you want, change the flooring or the fixtures, add on or tear down – all without hassles.

Be your own landlord.

When you pay your rent, the money just disappears. When you purchase a home, you are acquiring something tangible while building equity. The longer you own your home, the greater the equity.

The Benefits of Owning Property.

Saving at tax time: for many, the purchase of a condominium is proving to be a good tax shelter. You can derive tax benefits whether you reside at your property or not.

Beat inflation: A home helps you keep up with inflation. Although not all appreciate at the same rate and some years are better than others, real estate has historically kept pace with, and usually appreciates faster than, the rate of inflation.

Build toward a secure retirement: Tax laws presently give most married homeowners an exemption of up to $5000,000 from capital gains tax on the profit they realize on the sale of a home they’ve lived in for two of the last five years. Unmarried homeowners can take a tax-free profit of up to $250,000.

Homeowners are a recognized force in the community.

Homeowners are unique. When you live in a neighborhood or building that is owner-occupied, you and your fellow homeowners are more likely to make sure high standards are maintained by investing their time, money and effort to increase their property value and improve their community.

As an owner, you get important income tax advantages.

Your best interest: All interest paid on a mortgage is deductible for income tax purposes. And in the early years of a mortgage, most of your payments are interest. Remember, too that property taxes are often deductible and that other special tax deductions such as Energy Credits are also available to homeowners.

How to look at mortgage interest rates: Don’t be fooled. You pay much less in interest that the mortgage rate of your loan, because the interest you pay becomes tax deductible.

Improvements you make on your home pay you back.

A renter who makes property improvements does not benefit financially from those improvements at move-out time. However, the homeowners can gain back some or all of the cost of the improvements they have made when selling their home.

How you can build “trade up” value: Even if your first home isn’t your dream home,” you are working your way up to it! With possible appreciation and some home improvements, it may provide you with enough equity to make a down payments on the home of your dreams.

Compare the Advantages. Should You Rent or Own?

	Rent	Own		Rent	Own
Deduct Mortgage interest in calculating income tax?	No	Yes	Improvements within the home contribute to future value?	No	Yes
Deduct real estate taxes in calculating income tax?	No	Yes	Resale in years to come?	No	Yes
Build equity?	No	Yes	Property can be put in a trust?	No	Yes
Hedge against inflation?	No	Yes	Property can be passed on to your heirs?	No	Yes