I’ve been working with many new buyers this summer and the number one question I receive from first time buyers is what are the advantages to buying over renting? Just so I don’t overwhelm 1st time buyers I’ll make this blog a series starting with the Top 3 Benefits of Becoming a 1st Time Homeowner.

1 – Tax Advantage: Without going into too much detail there is a tax write-off for your mortgage interest, property tax, and other various home payments surrounding the financing of your home. This write-off will help lower your income tax you owe to the federal government. For more information on the tax benefits for homeowners check out: http://www.bankrate.com/brm/itax/news/20030207a1.asp

If you’re renting the tax savings goes to your landlord.

2 – Home Appreciation: In strong real estate markets, homes appreciate a certain percentage each year. For example, if you buy a condo for $300,000 and put 10% down ($30,000); and your home appreciates 3%, that’s a gain of $9,000. So you’ve gained $9,000 on a $30,000 investment – that’s a 30% return on your investment.

If you’re renting you don’t see the appreciation gains because you don’t own your home.

3 – Building Equity: While home appreciation has to do with the general market conditions, home equity has to do with your individual investment. As you pay your mortgage, you are building equity (i.e. ownership) in your home. Further, any home improvements you make build equity by boosting your home’s value. For example, an improvement such as replacing carpet with hardwood floors increases the equity because the hardwood is much more desirable and increases the value of your home.

If you’re renting you’re paying someone else’s mortgage and not building equity for yourself.

If you’re contemplating making that leap into home ownership feel free to contact me with any questions.

A few of the other topics in the series will include: Is what is said in the media pertinent to me as a first time buyer? The Steps to take before I Decide to Buy? Questions to ask my Real Estate Agent? To be added to my monthly newsletter and get updates on this series go to the newsletter link on the left. Check out the other blogs by Chicago Real Estate Agents. http://www.chicagoagentblog.com/