“You need to buy a house." How many times have you heard that? Turns out that could be bad advice. Here's why:
Every year, thousands of Americans jump into homeownership for the wrong reason, usually pressure from friends or family. It turns out a lot of them could actually save money by renting.
As the Wall Street Journal wrote in a 2001 article, “Contrary to popular opinion, renting can often be the better alternative, especially if there's a chance you'll stay put less than five years."[1]
This brochure is designed to help you make an educated decision about your housing choice. There are many good reasons to buy a house, but most of them are not financial. The investment potential and the tax savings associated with homeownership are often overstated, while the costs of homeownership are frequently understated.
Instead of feeling pressured to buy, you should choose the housing that best suits your lifestyle. If you value convenience, amenities, flexibility and superior locations, you probably ought to rent. This brochure explains why you can do so with the knowledge that you are not “throwing your money away."
The fastest growing segment of the apartment market is households earning $50,000 or more.[2] What do they know that you don't?
MYTH# 1: I'll reduce my tax bill if I buy a house.Reality: A majority of owners reap no annual tax benefits from owning a house.
The biggest homeownership myth in the country is that owning a house is a huge tax break. If your mortgage interest and other qualifying expenses aren't more than the standard deduction ($9,500 for joint filers, $4,750 for singles in 2003), there is no tax advantage to owning. That's one reason why only 34% of all taxpayers itemize.[3]
Even if you are able to deduct your mortgage interest and property taxes, remember that depending on your tax bracket, you are still only saving no more than 10 cents to 35 cents in taxes for every dollar you pay in mortgage interest.
To read the whole article, visit
MyNewPlace.com.