In his paper, Eric Belsky reveals five financial reasons people should consider
buying a home.
Here are the five reasons, each
followed by an excerpt from the study:
1.) Housing is typically the
one leveraged investment available.
“Few households are interested
in borrowing money to buy stocks and bonds and few lenders are willing to lend
them the money. As a result, homeownership allows households to amplify any
appreciation on the value of their homes by a leverage factor. Even a hefty 20
percent down payment results in a leverage factor of five so that every
percentage point rise in the value of the home is a 5 percent return on their
equity. With many buyers putting 10 percent or less down, their leverage factor
is 10 or more.”
2.) You're paying for housing
whether you own or rent.
“Homeowners pay debt service to
pay down their own principal while households that rent pay down the principal
of a landlord.”
3.) Owning is usually a form of
“forced savings”.
“Since many people have trouble
saving and have to make a housing payment one way or the other, owning a home
can overcome people’s tendency to defer savings to another day.”
4.) There are substantial tax
benefits to owning.
“Homeowners are able to deduct
mortgage interest and property taxes from income...On top of all this, capital
gains up to $250,000 are excluded from income for single filers and up to
$500,000 for married couples if they sell their homes for a gain.”
5.) Owning is a hedge against
inflation.
“Housing costs and rents have
tended over most time periods to go up at or higher than the rate of inflation,
making owning an attractive proposition.”
Realize that home ownership makes sense for many Americans for many social and family reasons.
Realize that home ownership makes sense for many Americans for many social and family reasons.
Who do you know looking to buy or sell a home? Call David!
David Demangos
Keller Williams Realty
Cell: 858.232.8410
Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com
San Diego Real Estate Area Expert / Green Specialist / ALC Committee
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!
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