When you consider all of the possible benefits of owning a condo at the Summit, you may find it to be a wise investment. We all know that money doesn’t grow on trees, but your money can slowly grow over time by spending it in a way that has the best long-term benefits. For some, this may include owning property instead of renting. Here are a few reasons why.
Tax Benefits
You can write off mortgage interest costs and property taxes that you pay. Also, you can write off a yearly amount for depreciation of your property. Depending on your situation there may be many other tax benefits that your accountant or attorney can explain, especially if your income is taxed at a high rate. If you are a student, you might even be eligible to hold off on depreciating your property until you have a higher tax liability after graduation.
Less Expensive
Purchasing a condo likely costs less each month than renting an apartment. The chart below provides a cost comparison of renting vs. owning at the Summit, assuming a 25% down payment and good credit at 5.25%. (We can arrange for up to 100% financing for qualified buyers. Contact us for more information.)
| 1 Bedroom/1 Bath | 2 Bedroom/2 Bath | |
|---|---|---|
| Monthly Market Rent | $800.00 | $900.00 |
| Monthly Mortgage Payment (P&I) | $475.86 | $558.69 |
Low Interest Rates
An upside of the economic slowdown is the continuation of historically low interest rates. When rates are low, it’s a more advantageous time to buy.
Accrue Equity
Your monthly payment builds equity. Each payment goes towards the ownership of your asset instead of a landlord’s, and when the time is right, you can sell and recapture your equity as cash. Further, if you have roommates, the rent they pay to you may help cover your monthly payment. Avoiding rent may be one of the greatest advantages.
No Capital Gains Tax
Payment of the capital gains tax upon the sale of the condominium can be avoided with the correct loan, or by using a 1031 exchange or other government programs..
Tangible Asset
Many view investing in a home instead of stocks or other securities as a safer investment because a home has intrinsic value in its utility. No matter what happens in the economy, your investment will still be something that can be useful. Securities can lose 100% thier value and leave you with no concrete asset.