Renting vs. Buying In Bucks County
It's a question all first time home buyers in Bucks County have. Buying your first home can be a scary process and you'll want to make sure the decision is right for you. The top reasons most people have for buying a home are:
1. Pride of Ownership: Paying off someone else's mortgage doesn't instill much pride, because heck at the end of the day it's your apartment, but usually you can't paint it how you'd like to, you can't install that cool light fixture you saw in New Hope last week, and at almost anytime your landlord can pop by and check in on how you are treating his home. But when it's your home you get to put your own touch on it. You can really make it feel like a home because it's yours to do as you please with.
2. Controlling Your Future: While paying off your landlord's mortgage you never know if next year he'll want more from you, or if he'll want to sell it so you can never really settle down. If your landlord does put your apartment up for sale the next thing you know you have people traipsing through your home at different hours, often times in the evening when you are trying to relax after a long day at work.
One of the biggest complaints I hear from tenants is that it takes forever for their landlord to fix things so they either give it a go themselves, or deal with it because heck it's not their house. Although, the cost to fix things may be more when you own at least you are fixing your house, and don't have to wait for someone else to get the job done. You're in control.
3. Appreciation, Mortage Reduction & A Flat Monthly Payment: I wrote a blog yesterday So We've All Heard It, Right! Real Estate Is NOT The Investment It Once Was that takes a look at the average sales prices of condos and single family homes in Bucks County since 2001 and I think most people would be surprised to know that over the last 9 years even through the real estate bubble burst that homes in Bucks County appreciated between 5 - 8%. The blog goes on to show that if you purchased the average priced single family home in Bucks County in 2001 it would have cost you $225,000, and your monthly mortgage would have been $1,330. In 2009 the average sales price of a home in Bucks County was $324,080 and from paying down your loan you would have $169,965 of equity in your home. Let's imagine you rented for all those years. Originally you could have rented a 2 bedroom 1.5 bath townhome in Liberty Square in Newtown Crossing for $1,300 per month, but today you'd only be able to rent a 2 bedroom 1 bath condo in Newtown for that price. So each year you spent $15,600 helping to pay off your landlord's mortgage with nothing to show for it. Over those 9 years that would add up to $140,400. So you've spent over $140,000 but you've downgraded your apartment, while the homeowner has lived in a single family home, has nearly $170,000 worth of equity, has never had to move and never had to worry about their rent increasing. They are also now 21 years away from not having to pay a monthly fee for a home ever again. They'll still have to pay taxes and insurance, but the $1,300 per month can now be spent as they please.
4. Tax Breaks: Checkout this blog which goes over the tax deductions you get when you own your home Tax Write-Offs for Home Owners. If you are single your max standard tax write off is $5,700. If you bought a $200,000 condo in Newtown, or the surrounding Bucks County area your tax write offs would be approximately double. When it comes time to sell your home you are allowed a Capitol Gains tax Exclusion up to $250,000 if your single and up to $500,000 if you're married as long as you lived in your home for 2 out of the last 5 years. I'm not an accountant so review the numbers with yours.
5. Because Bucks County Is An Awesome Place To Live: Last year Philadelphia Magazine Called Newtown An Awesome Place To Live, which it definitely is (I grew up here), but there are many other awesome places to live in Bucks County as well. There's Yardley, New Hope & Doylestown, which attract many homeowners, which in turn raises prices a bit, but guess what I live in Holland because I found it a bit more affordable yet I still enjoy all of these places because they aren't that far away. We also live less than an hour from Philadelphia, 2 hours from NY, and only 45 minutes from the Jersey Shore so when you want to do soemthing there's always plenty to choose from.
6. Awesome Schools: Bucks County isn't just a cool place to live it's also a great place to start a family and raise your kids. Recently, Newsweek put out a list of the top 6% of Public Schools Nation wide and guess what Council Rock & Central Bucks made the list, but these aren't the only good schools around there's Solebury (which Philadelphia magazine rated higher than CR & CB the year before) Pennsbury & Neshaminy as well which all made Philadelphia's top 50 schools in the area last year.
7. Today The American Dream Is As Affordable As Ever: Prices in Bucks County have come down to pre -boom levels and interest rates are at historic lows. To see how much rates effect your purchasing power checkout this blog Why "Now Is The Best Time To Buy" Isn't Just A Sales Pitch .
But! There's also more responsibility when owning your own home. Now when something breaks it's up to you to fix it. You can't just up and move to a new city, or town without selling your condo, or renting it out which brings on a whole new set of responsibilities. However, in the long run most people find owning their own home is better than renting and find the new repsonsibilities are worth it.