How to Stop Paying Rent

By Seth Jacobs Updated on 7/21/2017

Housing is a precious commodity that we all need every day. It's your choice to rent or to own, yet buying a home for yourself usually beats buying one for your landlord. If you're planning to stick around, however, owning may prove to be more rewarding. Here are five good reasons:

Why Buy?

1. Rates are near historic lows, and prices are still well below the past peaks. This unusual combination places the real cost of purchasing a home near a 50-year low.
2. Buying builds equity. On most mortgage loans, you pay down the principal balance with each payment. It typically starts at $100 per month for every $100,000 of loan balance and increases each month through the entire life of the loan. To make a fair comparison,  subtract principal paid from a home loan payment vs. the cost of renting the same property.
3. Home values rise over time. Increases are not guaranteed; however, if we use the last 50 years as a guide, values have typically risen at a pace above inflation.
4. Homeownership often brings tax benefits. Deductions for home mortgage interest and real estate taxes save many homeowners thousands every year. Others still find taking the standard deduction more beneficial. Always consult your tax pro for advice.
5. It’s more than just the money. Families become rooted in a neighborhood, school district, and community. Homeowners have the freedom to choose paint colors and make modifications. Pets are welcomed. Intangibles like these often formulate the most valuable returns.