3 Strong Reasons Why Owning Your Home is Better Than Renting

3 Powerful Reasons to Help Someone Own a Home

Social and Economic Benefits of Homeownership

If you are thinking about getting a Real Estate License, I want you to know that you are becoming a part of a good thing. Besides being able to make quite a bit of money, helping someone become a homeowner is contributing significantly to the quality of their lives and their future living legacies; their children and grandchildren.

Families and Children Tend to Become More Educated, Happier, Healthier, and with a Higher Economic Status

Home Ownership improves the quality of life for generations

There have been many studies that have proven that Adults and Children who grow up in a home that is owned by their parents as opposed to rented are happier, healthier, more successful, become more educated, and earn a higher income.

Reports have shown that teenage children of homeowners tend to choose to stay in school longer.

Daughters of homeowners have a reduced incidence of teenage pregnancy.

Studies have shown that children with parents earning incomes of less than 150% of the federal poverty line achieve higher educational success, hig

her incomes as adults, and are much less dependent on welfare.

Other studies have shown that living in an owned home as opposed to a rented home has increased positive physical, emotional, and psychological benefits. Probably due to increased self image.

Owning vs Renting Income Tax Deductibility Benefits

Most first time home buyers, especially the younger ones, do not realize that comparing the same dollar number mortgage payment is not the same thing as the dollar amount of rent. 

Owning is cheaper than Renting

Rent is paid with after tax earned income. Your mortgage payment is has tax deductibility advantages.

(Disclaimer: Do not use the following example for your personal income tax filing purposes. It is for an example only)

Let’s say for example that a renter is in the 24% tax bracket. They would have to earn approximately $1,449, accounting for federal withholding and social security paycheck deductions in order to have $1,000 cash to pay their $1,000 a month rent.

If a first time home buyer purchases a $200,000 home with an FHA mortgage, their monthly mortgage PITI payment will be around $1,414 a month. At an interest rate of 4.5% per year, the first year’s annual interest is around $8,837. The estimated real estate property taxes would be around $2,400 a year.

This is a combined $11,237 in deductible payments for the year or $936 each month. At a 24% tax bracket income level, this equals around $225 in direct tax savings. This is an after tax payment of $1,189.

Remember, this $1,189 after tax monthly mortgage payment is being compared to a $1,449 actual gross earned income $1,000 a month rent payment.

It is a no brainer.

Equity Buildup vs Security Deposits

The last example of why it is so beneficial for someone to own their home rather than rent is the equity buildup from the combination of paying your loan balance down and your real estate appreciating in market value. When you sell your home, you leave with money. When your lease is up, you may get your security deposit back. 

Owning your Home gives you Equity Build Up

Let’s go back to our assumed $200,000 home. The FHA mortgage required 3.5% down or $7,000.

After 5 years, the loan balance is around $178,000. This is already $22,000. 

However, homes are appreciating at about 4% each year. The value of the $200,000 home is now $243,000.

This is now an equity build up of $43,000 plus $22,000 or $65,000.

When the lease is up and they move out of their rented house, they may get their security deposit of $1,000 back.

Again, a no brainer.

Owning is Better than Renting

These examples and numbers were broad on purpose however they are more than likely within a good range of expectation. 

I wrote this article to make sure that my friends and my students who are licensed real estate agents know without a doubt that you are doing a very good, positive, and powerful thing when you help someone buy a home. 

What are you waiting for? Take a Real Estate Class!

For those of you who are on the fence and still thinking about getting your real estate license, you also need to know that you are participating in an important aspect of someone’s future that has long lasting benefits for generations.

Come and take your Real Estate Class at The Climer School of Real Estate. You will love the Climer School Difference!

Be proud of who you are and what you are doing!

The Climer School of Real Estate was established in 1984

If you need to take a Real Estate Class, then you want to take it with us. The Climer School of Real Estate has the Best Real Estate Class in Florida. Find out what thousands of students already know.

Call us anytime at 4047-822-3926 (EXAM) or visit us at www.ClimerRealEstateSchool.com

Discover the Climer School Difference for yourself.

The Climer School of Real Estate is the Best Real Estate School in Florida

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