6 Reasons Why Buying Is Better
If you have been in the renting game for a while, you will know all too well the conversation starters from well-meaning relatives and friends that go like this, “So, have you thought about buying a house yet?” “Are you still renting?” or my personal favourite, “You better get in quick before the market changes and you’ll NEVER be able to buy!” Pretty soon, it may start to feel as though the neighbours, your hairdresser and every man and his dog has weighed in on your situation and you haven’t even stepped foot outside of your rental yet!
All of these comments, albeit at times misdirected, seem like a great idea to anyone who already owns a home and who think that their questions are somehow motivating you to hop off your lazy butt and just purchase a house already! If it were that easy, you would have a house all to yourself already. Heck, you’d have ten! But, we all know, buying a home is not that simple. There are reasons, only known to you, about why you haven’t. Yet. That is, if buying is what you intend to do. Perhaps you have already dipped your toe into the icy water of property purchasing but have not been particularly wowed by the avalanche of information and paperwork that comes with signing that daunting dotted line.
Let me step you through some of the benefits of owning a house:
If the word ‘appreciation’ has never meant anything more than ‘feeling thankful’ to you, let me demystify it for you. ‘Appreciation’ in real estate terms simply means the rise in house prices over time. House prices in Australia are on the rise, which is a good thing, if you own one of them! According to a recent Sbs.com.au article (Brycki, 2015), the average Sydney property has risen 26% since the start of 2013 and other major cities are on a similar pathway.
- Benefit from Tax Deductions
Owning a home can reduce the amount you pay in income taxes each year. Your mortgage interest and property tax payments may be able to be deducted from your federal taxes, as well as many state taxes (Advantages of Home Ownership, n.d.). When you first take a mortgage out, most of your monthly payment is interest so these tax deductions can make a huge difference to your pocket.
- Peace of Mind
Nothing screams, ’I’m still renting’ more than a ‘Rental Inspection Notice’ or worse still, an Eviction Notice’ plastered on your fridge. If you can see yourself benefiting from the security of not being displaced when the owners of your current rental decide to sell up, buying may be the option for you. When you are in a one area for a period of term, you can establish a sense of community. Knowing your neighbours, sussing out suitable schools or even having a regular coffee shop or favourite takeaway joint nearby are all factors contribute to peacefulness.
- Renovate Like It’s 99
So, you’ve been watching The Block for a while now and each time you do you long to put your creativity and ‘inner design beast’ to work, or even just hang those darn picture frames that are piling up on the floor around your TV cabinet on the wall. Owning your own pad gives you the freedom to get creative, on your own terms. Buying an older property that requires some minor renovations could give you a sense of accomplishment when the dust has settled and you are sipping that wine on your newly positioned furniture in your modern chic lounge room.
- Borrowing Power
Having a home loan means that a bank has taken a risk on you. As you have an asset (your new home), and provided you keep a solid track record with your mortgage repayments, you will begin to acquire ‘borrowing power’ because of your strong credit history. This puts you in a position to be able to be able to borrow in the future for a new car, maintenance or other investments, including purchasing a second property.
- Forced Savings
Paying your mortgage is a form of forced savings. How can that be possible? Well, each time you pay your mortgage you are reducing the overall cost owing on your home, which is increases the equity in your home (Advantages of Home Ownership, n.d.). As you accumulate equity, which is the difference between the current market value of your property and the amount you still owe on the mortgage (Equity, n.d.), you will have the opportunity to borrow against your home for the purposes of investment or debt consolidation, so you never have to feel financially ‘frozen’ again.
And the cons?
Let’s not put a dampener on your mood, but do keep in mind as a property owner you will need to consider the ongoing costs associated with owning including maintenance, repairs, rates and insurance bills.
The 2011 census revealed that 67 percent of Australians are home owners (Fact Check: Australian Housing Market, n.d.). If you would like to join almost 70 percent of Australians by purchasing a home of your very own, make contact with us so that we can talk about these ideas in more detail with you. We know it is a big step and can sometimes feel like a leap of faith. We can’t decide what is best for you, but at least let us shine a light on the pathway for you!