A great base of potential home buyers can be built with people who have experienced rental exhaustion, or simply grown tired of the renting experience. While renting a residence can be convenient for a time, clear downsides to renting lead many people to seek the home ownership path.
The most common complaints from renters tend to be environmental — thin walls and noisy neighbors. Small inconveniences that once seemed manageable can become an irritant over time. With a rental property, it is also rare that personalization of the space is permitted within the leasing agreement. Financial deterrents to renting are likewise a major downside and can be used as a focus point when marketing to potential home buyer clients. Renting from a landlord means that the monthly fees can be raised at any time. And even if rent remains at the initial cost, the renter’s monthly monetary investment is benefiting another person’s future instead of building the renter’s own equity. It’s also important to communicate to those currently renting that the financial benefits of home buying and home ownership begin almost immediately. Tax deductions are one of the great perks to home ownership, since taxpayers who do not own homes are unable to utilize this itemization. By itemizing tax deductions, homeowners can add any interest paid on their home mortgage. While this deduction is restricted to $1 million of debt incurred for the purchase or renovation of a home, this limit does not affect the average borrower. For interest paid on home equity debt, borrowers can deduct up to $100,000. Property taxes can be itemized as well, and that deduction saves homeowners millions of dollars each fiscal year.
In addition, it is wise to mention to renters that the equity built from owning a home, as the principal portion of mortgage payments, helps build financial integrity. Economists call this “imputed rent,” and it is excluded from taxable income for homeowners. Though homeowners are essentially both their own landlord and renter, the tax code fortunately treats them as renters. Landlords are required to treat the rent they receive as additional income and are therefore taxed on these earnings.
Another major benefit to home buying is the possibility of someday completely paying off the property. As long as you’re renting, there’s no possibility of ever being “rent-free.” However, by owning a home, the “rent-free” life is an attainable future to strive toward. If homeowners ever move, they are able to earn a profit from the home sale. Renters, on the contrary, must enter their new residence without those extra funds. With increasing home values throughout the United States comes a greater appreciation of home purchases. By communicating all the incredible benefits of home buying, it is easy to grow your database of potential clientele.