Buying a Condo vs Renting an Apartment: https://www.hauseit.com/rent-vs-buy-nyc/
Reduce Your Buyer Closing Costs in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
Buying a condo vs renting an apartment is not always better. With condo ownership comes great responsibility in the form of maintenance, repairs, crazy condo boards, property tax increases and building special assessments. On the other hand, paying rent means no tax benefits as you throw away money every month without building any home equity.
Build Home Equity vs Paying Rent
When you own your home, your monthly mortgage payments consist of both loan principal as well as interest payments. Every time you pay down some principal on your mortgage, you reduce the remaining balance on your loan and increase the amount of equity you own in your home.
No Arbitrary Rent Increases
Buying a condo vs renting means you’ll never have to face an arbitrary increase in rent, just when you were starting to get comfortable. If you own your own condo, you can stop feeling like a nomad, ready to move to a new apartment at a moment’s notice in case your rent gets jacked up too much.
Tax Benefits of Buying a condo vs renting
There are some tax benefits associated with home ownership, whereas there are absolutely no tax benefits from paying rent on a personal residence.
The tax benefits of buying a condo vs renting an apartment for your residence include the ability to deduct interest on the first $750,000 worth of loan balance. Furthermore, if you sell a property that has been your primary residence for at least 2 out of the last 5 years, then you’ll be able to exempt up to $500,000 in gains from capital gains tax for married couples, and $250,000 in gains for single tax filers.
Bragging rights when you own vs rent
With great property comes great bragging rights, or at least the pride that comes with home ownership. There’s a reason why popular hip-hop songs have lyrics like “I got a condo in Manhattan.”
No Repairs or Maintenance when Renting
The best part about renting vs buying is that you’ll never have to worry about maintenance or repairs. Did the refrigerator stop working due to old age? Well, it’s not your problem as long as you didn’t purposefully damage it, and many lease agreements will obligate the landlord to provide appliances in working condition.
Property Taxes Are a Wealth Tax
Owning property has its downsides, primarily from having a substantial amount of your assets subject to arbitrary property tax increases from your local government.
Do you really want a substantial portion of your net worth in the hands of your local government? If they get your property taxes wrong, or arbitrarily tax you more than comparable apartments in your neighborhood, you’ll be in for a lot of hassle.
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