Do you want to build financial security for life? Then one smart habit can help you do this not only for now but for the future. And that move is to buy a home rather than rent whenever you move to a new location. How can this set you up for success? Here are a few ways.
1. It May Be Cheaper
It may sound counterintuitive, but in many areas, buying a single-family home is cheaper than renting one. It may even be comparable or cheaper than renting an apartment or other multi-unit housing. This makes your budget less stressed from the very beginning.
2. It Appreciates in Value
While most people shy away from buying a house if they think they may only be in the area for a short time, it can still be a good investment due to increasing price values. Depending on the market in the area you buy in, you could break even on the cost of buying after as little as five years. If you stay between five and seven years, experts generally find that you will have turned a profit.
3. You Can Rent It Out
Certainly, one of the biggest benefits of buying homes as you move about is the potential for rental income. Many Americans keep their homes when they move on, turning into small-scale landlords — either for long-term tenants or short-term renters. This could provide a valuable second source of income now and it can be part of your retirement planning for the future.
4. Remodeling Boosts Value
If you're a handy person, buying a single-family home that needs some work provides two benefits. First, it gives you something to do. This can be particularly useful when you're new to an area or you temporarily live somewhere you're not happy with. Second, it means you can improve the home's sale or rental value and turn a profit when you leave.
5. You May Avoid Taxes
In general, as long as you live in your primary home for at least two of five years, you can avoid paying capital gains taxes when you sell. In addition, those who want to become landlords may then form a corporation in order to buy the property, avoiding personal taxes, and delay taxation again until its sold by the rental corporation. Whatever route you take, a good tax strategy is possible.
No matter what your financial goals are now or in the future, buying a home even during a short stay could be a path to success. Learn more about single-family homes by consulting with a real estate agent in your destination area today.