Home Ownership Resource Guide
Buying vs. Renting:
Owning a home can help build wealth in the following three ways: (1) home value appreciation; (2) tax deductions; (3) capital gains tax break. Not to mention all the intangible and emotional value homeownership can bring.
Interested in knowing how much money you can save as a homeowner? Contact us now for a free and detailed buy vs. rent analysis.
Top 3 Benefits of Homeownership:
(1) Home Value Appreciation—As a home owner, the value of your home may increase through both appreciation and improvements added for comfort and enjoyment. The appreciated value or equity in your home could be substantial. For example, our client purchased a Hawaii Kai property in the late 90s for about $600,000. Several years later, we sold their property for $1.5 million. They earned nearly $1 million on their initial investment! No surprise. According to the Honolulu Board of Realtors, the average sales price for single family homes on Oahu increased by 233.2% or 5.1% annually between 1985 and 2009 (24 years).
Smart investors can use the equity in their home as down payment to upgrade to a larger home if they are expanding, or to purchase several investment properties if they are downsizing. Renters, however, are forever stuck paying their landlord’s mortgage and are unlikely to ever benefit from any increase of the home’s property value.
(2) Capital Gains Tax Break—When you are ready to move from your first home, you won’t need to pay capital gains tax (usually 15%) on the first $250,000 you make in the sale. Double that tax benefit to $500,000 if you’re married and filing jointly! To be eligible, you must have lived in your home two out of the previous five years before selling.
Renters are forever investing in their landlord’s future and unlikely in their own.
(3) Tax Deductions—Your annual taxable income could be substantially reduced by deducting the payments you make on property taxes and yearly mortgage interest. For example, if your gross income is $60,000, and you have a $12,000 tax deduction, your taxable income is reduced to $48,000. Additionally, points and interest payments on a home improvement loan or home equity loan are also tax-deductible. Home owners can also enjoy tax-deductions for home office expenses, certain home repairs, and moving costs.
Renters are forever paying too much in taxes and losing hard earned money.
For a full range of homeowner’s tax benefits, please discuss with your CPA or tax attorney. Go straight to the source by reviewing IRS Publication 530, Tax Information for First-Time Homeowners.
Interested in knowing how much money you can save as a homeowner? Contact us now for a free and detailed buy vs. rent analysis.
Owning a home can help build wealth in the following three ways: (1) home value appreciation; (2) tax deductions; (3) capital gains tax break. Not to mention all the intangible and emotional value homeownership can bring.
Interested in knowing how much money you can save as a homeowner? Contact us now for a free and detailed buy vs. rent analysis.
Top 3 Benefits of Homeownership:
(1) Home Value Appreciation—As a home owner, the value of your home may increase through both appreciation and improvements added for comfort and enjoyment. The appreciated value or equity in your home could be substantial. For example, our client purchased a Hawaii Kai property in the late 90s for about $600,000. Several years later, we sold their property for $1.5 million. They earned nearly $1 million on their initial investment! No surprise. According to the Honolulu Board of Realtors, the average sales price for single family homes on Oahu increased by 233.2% or 5.1% annually between 1985 and 2009 (24 years).
Smart investors can use the equity in their home as down payment to upgrade to a larger home if they are expanding, or to purchase several investment properties if they are downsizing. Renters, however, are forever stuck paying their landlord’s mortgage and are unlikely to ever benefit from any increase of the home’s property value.
(2) Capital Gains Tax Break—When you are ready to move from your first home, you won’t need to pay capital gains tax (usually 15%) on the first $250,000 you make in the sale. Double that tax benefit to $500,000 if you’re married and filing jointly! To be eligible, you must have lived in your home two out of the previous five years before selling.
Renters are forever investing in their landlord’s future and unlikely in their own.
(3) Tax Deductions—Your annual taxable income could be substantially reduced by deducting the payments you make on property taxes and yearly mortgage interest. For example, if your gross income is $60,000, and you have a $12,000 tax deduction, your taxable income is reduced to $48,000. Additionally, points and interest payments on a home improvement loan or home equity loan are also tax-deductible. Home owners can also enjoy tax-deductions for home office expenses, certain home repairs, and moving costs.
Renters are forever paying too much in taxes and losing hard earned money.
For a full range of homeowner’s tax benefits, please discuss with your CPA or tax attorney. Go straight to the source by reviewing IRS Publication 530, Tax Information for First-Time Homeowners.
Interested in knowing how much money you can save as a homeowner? Contact us now for a free and detailed buy vs. rent analysis.