« | Main | »

5 Reasons to Buy

By admin | February 16, 2008

An article by Blanche Evans posted on Realtor.org gives helpful insight to those seeking to buy a home and are not sure if now is a good time.  The article reads:

It’s high time we told buyers (and sellers, for that matter) the truth
about whether a home is a good investment.

Despite what Wall Street wants you to believe, owning a home isn’t the
same kind of investment as stocks or bonds. What you get is a USE asset
that depreciates over time while it grows in market value. All you have
to do is keep the home in good repair to maximize your investment.

Here are five reasons why you get more for your money with a house than
the stock market:

1. Leverage. With stocks, you put in all your money for a little piece
of a company. With a house, you put in a little money to get the entire
house.

2. Tax benefits. Uncle Sam knows that owning a home is a pain in the
neck; that’s why you get tax incentives. These are basically government
bribes to get you to buy.

Think about it, with what other investment can you put in 5 percent of
the cost of the asset, reap all the appreciation, and pay no capital
gains? That’s right: live in your home for at least two years, and you
don’t have to pay capital gains tax on up to $250,000 in appreciation
 if
you’re single and a combined $500,000 if you’re a married couple.

And that’s not all – consider the benefits of fixed-rate mortgages,
property tax write-offs, interest rate deductions, and depreciation. Is
this a great country or what?

3. Control. When you buy stocks, you’re paying some CEO 500 times the
average worker’s salary for company performance that most other workers
would lose their job over. With a home, you have control – what you
 buy,
how much you pay, and where you live. You can improve the value with
repairs and updates. Try comparing that to getting heard at the next
shareholders’ meeting!

4. Lifestyle. Do you want to look at a concrete jungle or your children
playing in your own back yard? With a home, you’re purchasing a vantage
point for yourself and your family. The neighborhood you want to be in,
and the size and style of a home that fits your needs.

5. Value. Unlike some stocks, your house will seldom become worthless.
Barring a catastrophe, your home will retain a major portion of its
value, even in the worst of times. So don’t freak out about slight
fluctuations in the value of your home in any given year. You’ll make
 it
up. Housing has lost value only one year out of the last 35. It’s more
normal to beat inflation by 1 percent to 2 percent.

Take Stock in This
So let’s add a little perspective here. You lost a greater percentage
 on
the stock market this past year than if you owned a house. You lost
 more
on your SUV. And you sure lost more on your iPhone.

And keep this in mind: When it rains, which would you rather have over
your head – a roof or a stock certificate?

For more information visit http://www.realtor.org/rmomag.nsf/pages/BlancheEvans200802?

Topics: | No Comments »

Comments