When to buy a house
It is a fundamental decision whether or not to buy a home, as well as the “gateway” that buyers must first go through to buy a house. However, in most cases, you don't feel much of the need to persuade you to buy a butler. This is because most of them already have a very strong craving for home purchases. (Rather, sometimes you have to dry it.)
However, there are often people who give up or put on hold after going to the house they wanted to buy. There may be many reasons, but the underlying one is this: Lack of concrete confidence in the benefits of homeownership.
3 Reasons to Buy a Home Financially
1. Home prices rise
Median home price in CA in 1983 $114,000
CA Median Home Price in 2018 $557,600
4.64% average annual increase rate over the past 35 years
In the short term, the ups and downs are severe, but in the long term, an average of 4.5% per year is considered a reasonable forecast. Let's make 10 concessions and say 4%. Let's say 3.5%. Then the overall numbers will weaken, but the fundamental conclusion will come out the same.
$500,000 now, 4.5% annual growth, about $2,000,000 after 30 years
2. Fixed housing cost
Another tremendous benefit of homeownership is the ability to fix housing costs.
More precisely, the cost of housing a home decreases over time.
In the above scenario, it starts at $2750 if you buy a house, but about $1100 after 30 years.
Rentals start at $2200, but after 30 years they increase to about $6000.
3. Principal and tax benefits
Mortgage interest and property taxes are tax deductions.
Starting at $2750, it's less expensive than renting $2200. However, considering the principal and tax deductions, the actual housing cost is around $2000. Rather, it is less than the $2200 rental.
When looking at the reasons for buying a house and for continuing to rent, the following list is "generally". It's a subjective list. Individual differences can be large. If you can invest a little time to organize your priorities and adjust disagreements with your family, the process of buying a butler will be easier. Either actively push it forward with confidence, or hold it neatly...
Reasons to buy a house
Quality of life
Freedom (No Landlord)
Children's psychological stability
Usually a safer neighborhood, a good school district
A sense of belonging as a member of a local community
Decorating the house
Interest and property tax credit
Rising house prices
The safest investment historically proven
Capital protection (money that will disappear if you just have it
Capital gains tax exemption benefits
Principal Accumulation→ Forced Saving
A financially distant perspective and consequent long-term financial planning
Moderate and Strategic Spending
Motivation to work harder
Leverage (loan: the concept that you can buy a house with “others' money”)
Economical loss when renting for a long time
The best retirement funds
Possibility to start with a small house and progress step by step
Equity is extracted and used for business funds, etc.
Reasons to keep renting
Relatively small payment (at least initially)
Small amount of money (usually 1-2 months deposit)
High Mobility (easy to move around)
Convenience (small burden on home repair/management)
Concern over the possibility of a plunge in home prices
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