Should I Buy or Rent a Home in New York City?
When considering moving to a new space, you may find yourself debating whether you should buy or rent. Specifically in New York City, renting has become the more popular option. However, is it the wiser choice? At SPiRALNY, we don’t think so.
While renting may require less upfront costs, buying an apartment is the better long term decision. Over time, your property will gain value and help you save money, not to mention the pride of owning your own space. Here are a few reasons we at SPiRALNY recommend buying a home, rather than renting.
Owning a home saves you money over time.
It is true that buying a home requires a good deal of upfront costs, such as your down payment and other miscellaneous closing costs. However, if you can afford these upfront expenses, studies show that over time you will actually end up saving money. In the majority of the nation’s largest housing markets, monthly mortgage payments are lower than rental rates.
Further, studies show that having a monthly mortgage payment inadvertently forces homeowners to save their money. Because owning a home can result in unforeseen maintenance or repair costs, many homeowners get in the habit of putting extra money aside each month.
Homeowners have the opportunity for additional streams of income.
When you own a home, you have the opportunity to rent out any unneeded space, such as an unused floor or room. You can even list the space on Airbnb, allowing you to decide when you do or do not want the space being used. In either case, there is an opportunity to collect a separate stream of income which can contribute to the monthly costs of your home.
Homes typically gain value.
In most circumstances, homes appreciate over time, meaning you will be able to sell the home for more than you originally purchased it for. A home you buy today for $500,000 may end up being worth $100,000 more in a decade or two.
Further, as your home’s value increases, your personal equity will, too. When renting, your monthly payment is paid to a landlord. When owning a home, your monthly mortgage payment is essentially paid back to yourself, which increases your equity and brings you closer to complete ownership.
Homeowners have access to additional tax deductions.
Another way that owning a home saves you money is through tax deductions. Homeowners can itemize up to $10,000 in property taxes and up to $750,000 in mortgage interest for tax deductions. This makes a huge difference in your tax returns and lowers the overall cost of owning a home.
A fixed mortgage can’t increase, but rent can.
If you have a fixed-rate mortgage on your house, your mortgage payment can never increase. This fosters budget stability, as you have the confidence that your mortgage payment will be the same, month after month. On the other hand, if you are renting, there is always a risk that your rent will increase (unless you are in a rent-controlled apartment, which makes up around 1% of the apartments in New York City).
Owning a home means you’ll never have to deal with a landlord.
As most renters would attest, dealing with a landlord can be extremely frustrating at times. Whether it is waiting on them to fix a leaky faucet or the potential risk of being evicted at any time, landlords are something most would rather not have to deal with.
While owning your own home means you are in charge of all potential issues or repairs, it also means you don’t have to wait on anyone else to take care of them for you.
The space is yours.
One of the greatest benefits of buying a home is the pride of being a homeowner. Being a homeowner is a symbol of achieving success, but more importantly, it allows you the freedom of doing what you want with your own home.
From renovating your kitchen to painting the walls, homeownership means you can customize the space how you’d like, and don’t have to answer to anyone else. Further, any improvements you make will increase the value of your home should you want to sell it in the future.
Deciding to buy a home is one of the biggest financial decisions you will make in your lifetime. While it requires a great deal of consideration and responsibility, owning a home affords you a number of benefits you simply wouldn’t have as a renter.
If you are considering buying a home or would like to start looking at properties, contact us at SPiRALNY so we can set you up with one of our experienced agents.