The decision whether to rent long term or to buy a new house depends on a lot of factors. This decision depends on different markets- what makes sense in New York City might not work in Las Vegas, and vice versa. Also, because homeownership shows the person’s status quo to a certain extent, it becomes more difficult to decide whether to rent or to own a house since the decision will have an emotional and social pressure.
Renting or buying a house is one of the biggest decisions you are going to make in your lifetime. Make sure to evaluate the costs, benefits, and drawbacks of renting vs. owning las vegas luxury real estate.
Advantages of Buying
1. Building equity. This is how it works: when you pay your mortgage, part of it goes to the loan’s interest while the rest pays the principal. It means any amount you pay for the loan’s principal is your equity. It represents the percentage of the house that you already own. If you’re able to reach 20% equity, that will be sufficient to apply for a home equity loan or you can also consider refinancing your mortgage, if you do this you could be eligible for lower interest rate or a longer window of time to repay the loan.
2. The government gives tax benefits to homeowners that are not available for renters. Be reminded though that not all homeowners can avail of these benefits. Several states exempt homeowners from paying a portion of property tax. If you are going to pay your federal tax, you can deduct your property taxes and what you paid for the interest of your mortgage. This can substantially reduce your taxes especially if you have a higher tax obligation.
3. Source of income. If you don’t need to stay there, you can have the house rented. The payment for the rent can serve as the money that you can use to partially or totally pay the mortgage, tax and insurance obligation.
Advantages of Renting
1. You don’t need to worry about the maintenance or repairs. If something is broken, you can just call the attention of your landlord or superintendent and they will have it fixed.
2. It is easier for you to relocate. Should you find a job elsewhere, relocating will be easier and less time consuming, and potentially cost lesser too.
3. You don’t need to worry about the status of the real estate market. The trends can swing up and down depending on various conditions. There is a possibility that the value will decline over time. This will never bother you; it’s your landlord’s problem.