There are some of us who still struggle with deciding on whether we want to rent or make the transition to becoming a homeowner. The latter may seem nerve-wracking, but today we’re discussing some of the beneficial reasons why owning a home versus renting is so much better.
Immediate Equity. Once you begin making payments on your mortgage your property’s equity increases. As a refresher, equity is determined by the current market value of your home minus what you owe in loans. Your home’s equity increases as you make payments on your mortgage balance or as the property value appreciates over time.
For example, if your home’s market value is $300,000 and your mortgage balance is $175,000, then you have $125,000 of equity in your home. After you sell, you can use this $125,000 to reinvest your money in yourself instead of renting and paying someone else.
Invest in Yourself. Usually, first time homebuyers are looking for a home that is an investment and not necessarily their dream home. You can use your equity in the future to move into a bigger home and a better neighborhood. You can also choose to invest your money into other properties or put it towards your nest egg.
Tax Advantages. We’re currently in the midst of tax season. As a home owner, you’ll receive a bigger return. Furthermore, in states such as South Carolina, home owners may be eligible for a Homestead Exemption which exempts a set dollar amount or a percentage of a home’s value from property taxes.
For example, the current property tax rate in South Carolina is 0.57%. If the assessed value of your home is $300,000 and your property tax is 0.57% then your property tax bill will equal $1,710. But if you’re eligible for a homestead exemption of $50,000 then the taxable value of your home would drop to $250,000 and your property tax bill would be $1,425.
Those are just a few of the reasons why you should make the transition from being a renter to becoming a home owner. To learn more, check out our video on The Benefits of Owning vs Renting. And if you’re ready to take the next step or have any questions, feel free to reach out to our trusted realtor, Qulia Bryant for your homebuying needs. Call us: 833-704-HOME or find your dream home online!