Homebuyers today in the Washington DC area are faced with the age-old question in real estate, “To buy or to rent?”
As you look closer at the costs of renting, you will quickly notice that the prospect of buying a home is much more lucrative, especially when it comes to long-term wealth.
Homeownership offers a better way to produce wealth and helps boost your net worth, unlike renting. If you are considering purchasing a home in Bethesda, Chevy Chase, Washington DC, Northern Virginia or a surrounding area this year, below are four reasons why you’re making one of the wisest financial decisions to date:
You are paying your own mortgage
Each month you have a housing cost, but the question is whose housing cost are you paying? When you own a home in the DC Metro area, you are paying your own mortgage. When you rent a home, you are paying your landlord’s. As a homeowner, your mortgage payment will go towards paying down your own principal.
You are saving money
In addition to saving money on the rapidly rising costs of renting, homeownership is a means of “forced savings.” Many people have trouble saving extra money while making their housing payment each month, but owning a home bypasses the tendency to defer savings.
You are boosting your net worth
The New York Times agrees— homeowners contribute significantly to their net worth simply by purchasing a home. “The net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth,” they stated in an editorial. A study from the Federal Reserve also found that the average net worth of a homeowner at $194,500 is 36 times greater than that of a renter at just $5,400.
There are tax benefits
If you’ve previously purchased a home in Bethesda, Chevy Chase, Washington DC, Northern Virginia or a surrounding area, you are aware of the tax benefits associated with homeownership. Homeowners are able to deduct the mortgage interest and property taxes from their income and what’s more, gains of up to $500,000 for married couples and $250,000 for single tax filers can be excluded from income if you sell your home for a gain.
Buying a home in Metro DC can be a lucrative move this fall and as your local experts, The Estridge Group is here to help answer any questions you have about the process or available properties in Maryland, DC, or Northern Virginia.
Do not hesitate to reach out!