Renting Vs. Buying Real Estate In Columbus OH
Columbus has a great selection of homes both for rental as well as sale. And with record low mortgage interest rates now available, it’s a good time to review your finances and cash flow to see if the hefty monthly rent check you’re currently sending your landlord might not be better spent building equity for your future.
Before you start house hunting and engage the services of a Columbus real estate agent, consider the following:
Taxes. Monthly mortgage payments always include a portion for interest and principal on the loan. They also often include portions for taxes and insurance. Federal income tax guidelines allow homeowners to deduct all of your interest and tax payments. This provides significant tax advantages to you.
Most people simply take the standard deduction on their income tax return since it’s quicker to file that way. Taking advantage of the tax breaks that come with owning a home requires you to itemize your deductions instead. Ironically, itemizing your deductions usually saves you money, because you can also deduct many other expenses like donations, or medical and dental costs over 7.5% of your income.
Home ownership sometimes requires upfront costs, like a down payment, earnest money and closing costs. It also requires you to budget money for regular maintenance of the property, as well as the payment of property taxes and homeowner’s insurance. Still, your total monthly cost may be similar to what you’re already paying for rent.
Studies by Ginnie Mae (the Government National Mortgage Association) state that home ownership usually becomes less expensive than renting in year three. This means that if you plan to stay in the same place for at least several years, you can save money by owning a home rather than renting.
Unlike renting, home ownership provides the benefit of building wealth, or equity, over time. Real estate has always been considered a good and safe long-term investment since property values often stay steady or rise over time and in the long run weather most economic slumps. The portion of your monthly mortgage payment that goes to principal becomes the equity you own in your home. It becomes an asset you can borrow against or leverage over time and helps to build financial security for you.
Sometimes, if your lifestyle is in transition or you just do not have the time to maintain a property, renting is a better option for you. However, home ownership provides some intangible benefits that renting can’t. The old saying, “A man’s home is his castle” is only true if, like a King, he doesn’t have to ask anyone for permission to make changes or improvements in the property. Home ownership provides a freedom of expression and feeling of security that isn’t possible through renting. You are in control of your living situation, not someone else like a landlord.
Finally, for many people home ownership provides a sense of security and stability. It taps in to the great American Dream of having your own space to enjoy and develop. It provides a sense of community and belonging to a neighborhood, because you are tangibly invested in it. Renting just can’t provide this.