Why you Need to Buy A House Even if you Don’t Have Money ? Earlier this year, I bought a house. Madam, listen to me, because my job is real estate, so there is some bias to real estate. Buying a house was the biggest financial investment I could make. The reasons are as follows.
30 years fixed rent, then free rent
When I lived in a one-bedroom apartment, I received a notice once a year that my rent was up. Last year I was raised $ 200 a month. It was more than 10%, followed by a slight increase in rents over the previous year. When you buy a home, the mortgage can be fixed for 30 years. That means your rent never goes up. ever! What exactly is this? Please refer to the graph below. I am assuming a 30% fixed mortgage modestly with a 3% increase in rents each year. In order to be able to compare apples and apples, I assumed that both were the same for the first year, but it was $ 1,250 a month.
As you can see, assuming you have been in the same house for 35 years, the homeowner will not pay anything for the mortgage because the mortgage will be repaid, and the tenant will pay close to $ 3,500 a month. Buy A House Even if you Don’t Have Money if it is not sufficiently convincing, consider another way. The tenant will pay $ 906,931 for the rent for 35 years and the landlord will only pay $ 450,000 for the mortgage payment. Also, the real estate market can be booming, collapsing, rebuilding, re-booming, housing (or mortgages at the time of purchase) will not change at all and this number will not change.
One word: stock
Another reason I chose to buy was to build equity. Unlike parents or grandparents, I do not have a reliable pension. I also do not believe that I can rely heavily on social security, so I have to save and invest. The chart below is another powerful chart. Describe how much you will build over time. Here are two things. The first is thanks. To simplify things I assumed the same $ 1250 mortgage payment. I thought someone could buy a $ 300,000 house with this money. The National Association of Realtors suggests that the price of existing homes rose an average of 5.4 per cent between 1968 and 2009. I was much more conservative. I modeled one-third of them at 2%.
What is the result? As you can see, a worthy $ 5,000 investment will be almost $ 590,000 in 35 years. Remember that this is only a third of what we have seen over the past 40 years. If history repeats itself, $ 5,000 will be nearly $ 1.8 million. Who needs an annuity at that point? If you bought your house before 30, you can get a nice nest egg until you are 65 years old and ready to retire. What does the tenant get after 35 years? Thanks for letting someone else retire?
I am paying this rental anyway.
One of the biggest reasons people lend is that they do not want to deal with "broken sinks" or "leaky toilets." When paying rent, keep in mind that you are paying someone else's mortgage, someone else's property tax, someone else's HOA dues, and someone who manages phone calls. That's reasons i am telling you buy a house even if you don’t have money some of the rent is home. Whether you rent it or own it, you pay for it. The only difference is that when you buy a house you do not benefit others. Save / Save that part. The landlord will not engage in business unless they make money. I will repair it every time I ask for repair, but I will raise my rent every year. They must somehow recover the repair. Why can not I make money for myself? Why are you giving it to someone else?
My tax year will save you thousands of dollars.
Many people forget how much they pay. Mostly because the majority of the employees are W2 employees and the employer "holds" the money to pay taxes. At the end of the year, we think the amount of our refund or the amount we pay is the amount of tax we pay. In fact, the actual tax we pay is the total amount we receive from the paycheck over the past 52 weeks.
Why buy a house without money?
Why you Need to Buy A House Even if you Don’t Have Money ? can I save my taxes if I buy a house? There is a simple scenario. Mortgage interest and property taxes are tax deductible. As can be seen in our case, property taxes at property tax rates of 1.29% and property taxes at $ 3,870 and $ 8,809.95 ($ 12,679.95 total), are tax deducted annually. That means the government will waive the $ 12,680 tax. Income drops to $ 12,680. If you are in the 28% tax group, you can save $ 3,550.39 in actual dollars in the first year. How about a tax refund? You can get more benefits by using some of your home in your home or by paying for certain improvements, such as solar heat. Assuming that everyone else is equal (and there is no property tax increase), you can save $ 124,264 over the same 35 years. What does the tenant save? $ 0.
Now let's do all this together.
lessee
I pay $ 906,931 for 35 years.
Contribution $ 0
Save $ 0 on tax
Monthly Rent: $ 2,159
owner
I pay $ 450,000 for 35 years.
$ 590,000-1800,000 in equity
Save $ 125,000 in real dollars
Actual cost to own: $ 0 (left as assets)
Why borrow when you can own it? Over the long term, ownership costs are negative. When you buy a house, you earn more money than you spend.
