Renting a house in Boston certainly has more than a few upsides.
You won’t be, for example, locked into mortgage payments for the next thirty years, and you can move just about anytime you want.
But renting has downsides, too.
In fact, for most people, buying is much better in several ways than renting.
So, if you’re renting a house in Boston, here are 5 reasons why you should buy instead.
1. It’s Often Cheaper
Sure, buying a house comes with a substantial amount of upfront cost, things like the down payment, closing costs, and loan processing fees. That’s one of the largest obstacles that prevents people from taking that big leap from renter-to-owner.
But in the long run, it’s usually cheaper than renting a house in Boston.
The main reason is that monthly mortgage payments are often less than you’d pay monthly for rent. So it doesn’t take long for you to have more money in your pocket if you buy rather than rent.
2. It’s a Good Investment
Buying a house is usually a good investment and vehicle for building wealth, whereas renting a house in Boston is no investment at all. Most of the time a house increases in value, but renting is just money out of your pocket every month.
Historically, real estate appreciates in value – meaning, it becomes worth more over time. And often, it’s a better investment than stocks. The financial benefits of homeownership can be better than investing in stocks because, as your home appreciates, its increase in worth is on the home’s entire value, not just the initial investment of the cash paid for the down payment.
So essentially, you are leveraging your cash down payment.
Real estate math – if you put $100k down on a $500k property that appreciates to $600k within a few years, that’s a 100% cash-on-cash return on your initial down payment. At 8% return, that $100k would take 9 years in the stock market to become $200k. Let’s say your home appreciates 5% each year – that $500k home will be worth $600 in just under 4 years. Leveraging the $100k to buy that $500k asset helped you grow your net worth by $100k in a fraction of time.
3. Mortgage Payments Won’t Increase
This is one of the most important reasons why you should buy instead of renting a house in Boston. Your rent can be raised at the whim of your landlord. But with a fixed-rate mortgage, your monthly payment will remain the same over the life of the loan, with the only increase coming with your property taxes and homeowners’ insurance.
Knowing exactly what you’ll have to pay each month – and not always fearing a rent increase – can provide a lot of budgeting breathing room and stability. You can also pay more than the minimum monthly payment and have lower mortgage payments later on because the excess will go toward paying down the principal on the loan and reducing the loan term.
Rent only increases over time.
4. There Are Substantial Tax Benefits
Although the tax benefits aren’t as great as they were before the new tax laws, for most people they still amount to some sizable benefits. The main tax benefits are that you can deduct both mortgage interest and property taxes at tax time.
Suppose, for example, you purchased a $300,000 home and paid 10% down. If you take advantage of the tax benefits, you could save more than $300 each month on taxes. This, over the years, amounts to substantial savings.
5. You Have Control
If you buy a house you also have control and can do nearly what you want. You won’t be constrained in what you can do by the rules and regulations and restrictions that come with renting a house.
Do want to install an in-ground pool in the backyard? You can do it if you’re buying the house.
Do you want to paint all the walls purple and orange? You can do that too.
Would you like the old wiring modernized? If you can pay for it, you can have that done.
But if you’re renting a house in Boston, you probably won’t be able to do any of these things.
Buy Now and Reap the Benefits
And these aren’t the only reasons why buying is better than renting a house in Boston. If you’re convinced and are ready to stop throwing money away on rent, contact one of our agents at NextHome Titletown Real Estate today. Our experienced agents can help you begin reaping the benefits of owning your own home. Contact us today at (617) 657-9811!
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