Homeownership has become an integral part of the American Dream. For many, it is a milestone for success and can provide a sense of independence. Homeowners have the freedom in renovating and making upgrades to their homes as they choose (with respect to local and state regulations), will build equity over time, and can enjoy tax breaks and create new revenue streams with their property. Here are some of the most popular reasons to buy instead of rent. Buy a home, and live the dream.
Freedom to Upgrade: Homeowners enjoy many freedoms, including choices of what to upgrade or renovate in their homes. Just remember to check building regulations in your state and local municipality regarding major projects. The regulations will vary, but permits are usually required when making changes to load bearing walls, installing plumbing, or wiring. Smaller cosmetic changes (painting, new flooring) usually don’t require permits.
The State of Maine requires building permits for all new construction, including remodeling and adding onto existing structures. Building permits are issued by the city where the property is located. It’s best to check before starting any project, as strict building regulations may require removing an upgrade that was performed without a required permit. Permit fees will vary: set fees for smaller projects like fences, to fees calculated by the cost of the building project.
Pride of Home Ownership: The American Dream was historically a dream of equality, justice, and democracy for the nation. The dream has come to include financial success over the years. Homeownership is a measure of that success. Buying a home has become a very important act of independence and an essential milestone in the lives of American citizens.
Secure Lodging: You won’t need to concern yourself with landlords and leases when you buy a home. You will have secured your lodging. Your monthly payment will be fixed when you choose a fixed-rate mortgage. Renters face increases in their monthly payments at the end of a lease and sometimes find themselves looking for new accommodations when a property changes hands. Secure lodging is important and becomes more important over time to older Americans living on fixed incomes.
Equity: You will be building equity when you buy a home, but not when you rent a home. You will own the home in 15-30 years after making regular mortgage payments. But you have the opportunity to build wealth long before you pay off the mortgage, by way of equity. Equity is the amount you own, versus the amount you owe on the mortgage loan, calculated using the current value of your home. Depending on the current market value of your home you might acquire a nice little profit long before the 30 year mark.
Tax Deductions: The tax breaks available to homeowners can translate to thousands of dollars. Review the rules and regulations as outlined by the IRS to determine what homeowner expenses can and cannot be deducted from your personal tax return.
Revenue Streams: When you own your home you can create additional revenue streams in several ways. You could rent out a room, you could rent out storage space on your property, or start a bed & breakfast or home based business. You will need to check with local and state regulations for home based businesses. Many towns have zoning ordinances regarding the type and size of businesses that can be operated in a residential area. Remember to check with local and state offices regarding building permits. The State of Maine has itemized the requirements for opening a bed & breakfast in the state, but there will be local codes and permits to consider as well. The state provides clearly defined requirements for starting a business on its official Maine.gov website.
Meservier & Associates has been serving Maine home buyers and sellers with a collection of resources, agents, and market data since 1988. We look forward to working with you. Contact us today!