It’s a common question that most people encounter at some point in their lives. Should we keep renting or would it be better to purchase a home at this point? There is a lot of advice about this subject available so it can be hard to determine what the main key points are to help with the decision.
We talked with Jacki Mayo Managing Broker of The Mayo Home Team in Anacortes Washington about the pros and cons of renting versus owning. Here are some pointers we learned from Jacki.
BIM: Jacki can you tell us what are some of the main reasons to own versus renting?
Jacki Mayo: The main reasons to own versus renting can vary depending on the person’s life circumstances. Most people find it better to own because the money that is going toward rent could be going into their own home, that is an appreciating asset. It’s also a leveraged investment since you are purchasing something of greater value with a smaller amount down. As the home value increases you are getting a return on the whole value of the home not just the money you have paid in mortgage payments. You also are exempt from paying taxes on the money gained if you sold the house unlike other investments like stocks.
BIM: There are other tax advantages as well aren’t there?
Jacki: Yes of course, I am not a tax professional and not giving specific tax advice. It is generally understood though that homeowners typically can deduct mortgage interest and property taxes when filing their taxes. In many cases this makes the cost of owning a home less than what they were paying in rent.
BIM: Are there times when renting is better than owning?
Jacki: Sure, in some cases a person might not be quite financially ready to purchase. But a good Realtor can help you determine if that is the case and often they can help you find ways around perceived obstacles. Another reason could just be lifestyle flexibility. Like a job that requires you to move every year. Or in a case where a person wanted to live in a city where the costs of purchasing are just too high for them but they don’t want to move out of the city for career or lifestyle reasons. That is a choice some people make.
BIM: What other benefits are there to owning versus renting?
Jacki: There are many. One often overlooked one is that it is a way of forcing yourself to save each month. When you pay your mortgage, you are essentially saving money since you now have that value in your home. You must pay your mortgage one way or another so you have basically forced yourself to save money for the long term each month. But one really big thing I see that attracts people to home ownership, is that they can do whatever they want with the property.
BIM: Ok tell us more about that.
Jacki: Well often rentals have rules you must follow. They may not for example, let you paint any color that is not approved or make other changes. If you hate the carpet in your house and you own the house you can put in hardwood floors instead or plant a garden without having to get permission or any other changes you want to make.
BIM: How can people learn more about you and The Mayo Home Team?
Jacki: They can visit my website www.islandhomes4sale.com