Being a homeowner has its perks and privileges but it also comes with a lot of responsibilities which all involve money. You need to think of repairs, taxes, insurance and maintenance. Not to mention city maintenance and repairs for streets, sewers, curbs and sidewalks near your home. If your house is in the corner of the block, these costs are doubled.
But don’t let these costs discourage you from becoming a homeowner. If you have the desire and enough funding to purchase a home, you should also have a good understanding of government policies so your house becomes a good investment. Consider it as a business with the city and state financial departments so your chances of making a promising investment is high.
Know what it takes to become a homeowner. Learn the ropes from completing and filing paperwork and getting in touch with necessary agencies. All the hassle involved in the process can be confusing and discouraging.
Your role is an investor. Your responsibility is to own and maintain your property. But you are not expected to know everything including the business side of owning a home. You need to team up with people you can trust who can help you ensure your house’s value will increase. This team should be able to guide you in making prompt payments, tax assessments, insurance, maintenance,( H.O.A. requirements, when applicable), upgrades and necessary repairs or maintenance. If these sounds all too overwhelming for you, you ight as well stick to renting.
Through renting you are giving business to the owners. Being a renter, you don’t need to come up with a large amount of money and no need for taxes.
Think about these things:
- How much is my income?
- How much is my rent?
- What is your credit rating?
- How much do you spend and how much do you save?
- How well do you handle your money?
You need to think about these things to determine if you’re ready to be a homeowner. You should also consider the economy. Do you know the current market climate? Do you believe it’s looking up? Are you knowledgeable when it comes to government regulations.
So ff you want to buy a property and work towards increasing the value, you as homeowner needs to be knowledgeable about finances, real estate, taxes, government policies and regulation, city building codes and restrictions and have good credit rating. If you know these things, you can make your investment grow and start other investments for your family’s future.
After some time, the value of the home you invested in will increase. This is the measure of your success as a financial wizard. You were able to take advantage of the government tax system and policies and borrowed against it. The money you borrowed is tax free and your earnings from it is tax-deductible.
People who used this method was able to finance other things like school tuition, payment for a new home or a new investment.
If you bought a home for $600,000 and you sell that same home for $1,000,000, you can have the gain tax-free for up to $500,000 for a married couple. Real estate transactions like this is the only one that have a no tax income advantage. You may want to consider them for your retirement fund.
When it comes to investing, no time is better than now. But don’t do it in haste. Careful planning is required. And do it with a team of professionals who can help you with financial and legal matters.
A real estate agency is really a team that lead you to good investments and they teach you how you could maximize your earnings – tax free.
Renting versus Buying
| Renting | Buying |
|---|---|
| no tax deduction | tax write -off |
| rental fee can go up anytime | house expensie will not go up |
| not free to make changes | you can make physical changes as you please |
| you can be evicted | home value increases over time |
| temporary | your home for as long as you want |