If you plan to stay in one area for several years there are a lot of good reasons to purchase a home instead of rent.
Prices go up
It costs you more each year to rent than it did the year before. If you are paying $1000 a month today and see a 3.5% increase, over the next 10 years you will have paid $140,000 (yes – One Hundred and Forty THOUSAND dollars).
10 Years of Rent Payments
Deductions
Real estate taxes are deductible on your Federal income tax. Also, if you took out a loan then the interest you pay on your loan is deductible. Talk to your accountant to find out exactly how you would be affected.
"Why Rent When You Can Buy" NAR Handout
Do the Math
Here is a brochure that does the math for you on a few of the issues.
$8,000 Tax Credit
Don’t forget about the $8,000 tax credit! If you add that in to that NAR brochure it makes a big difference, doesn’t it?
You can apply the tax credit to your 2008 or 2009 taxes. That means if you buy a house now you could file an amended 2008 tax return – the IRS could send you an $8,000 check after your purchase is finalized!
Want to know more about the tax credit for first time home buyers?
Read this post – details of who qualifies and what it means to you