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Is Buying a Home Still a Smart Plan?

With the burst of the housing bubble, credit crisis, and millions of foreclosures across the country, you may wonder if buying a home is such a good idea after all. However, it’s important to consider all of the facts. The important message to take away from these events is not that buying a home is a bad idea, but that you must be smart about buying your home.

The housing market, like every type of market, unavoidably has its ups and downs. That doesn’t mean buying a home is a bad investment. As a long-term investment, homeownership is still one of the best investments for individual households. Historically, real estate has consistently increased in value, despite shorter periods of depreciation due to local markets and/or national economic conditions. The data shows that homes generally appreciate about 5% per year.

Savings & Investment

Five percent may not seem like a great return on investment, but you have to think about it in the context of the situation. For example, let’s say you put 10% down on a $200,000 house. That’s a $20,000 down payment, or initial investment. At a 5% annual appreciation rate, your $200,000 home would gain $10,000 in value during the first year. Earning $10,000 on an investment of $20,000 is a whopping 50% return.

For further perspective, let’s say instead of spending that $20,000 on a down payment, you invested it in the stock market. With a 5% return, you would gain only $1,000 in profit.

Tax Benefits

So now you’re saying that a home may have a higher return, but that’s before you consider all of the costs of home ownership, such as taxes, etc. Well, think of it this way: your property taxes as well as the interest on your mortgage are both tax deductible. You can deduct those costs from your income, thus reducing your overall taxable income. In other words, the government is subsidizing your home.

Other Benefits

It’s easy to get carried away with all of the economic reasons for home ownership, but it’s important to remember that not every reason is financial. Have you ever wanted to paint the walls of your apartment? Well when you’re renting, you can’t. Has anything in your apartment ever needed updating, but the landlord refused to do it? When you own a home, you can make the space yours in almost any way you want. And you benefit when you do home improvements, both financially and psychologically. Homes generally have more space, for storage, living, etc. than other living arrangements. Not to mention that you have space outdoors for barbecuing, pets, and kids. Owning your home carries with it a sense of pride, accomplishment, and even an elevated social status.

So when you’re considering buying a home, consider the broad range of benefits that owning a home can have. And always make sure you have an experienced real estate agent and loan officer to help make sure you’re getting a home that is right for you, both financially and psychologically.

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Shawn Ramsey
Brokers Real Estate
1602 Forest Glen Ct.
Pantego, TX 76013
Office: 682-233-0224
Cell:    817-360-9045
Email: sramsey@dfwbre.com

Testimonials

"Shawn made buying my first home a breeze! He took the headache out of all the paperwork, the inspection process, and the endless search for the perfect house. In two weeks of working with him, we found exactly what we were looking for. He is knows the ins and outs of foreclosures. I'm thankful for the referral! " Jennifer Shoemaker
"Hey Shawn! I was just thinking about you today because I noticed it was the 23rd - its been 4 months since we've closed. I can't believe its already been that long. I don't know if I thanked you enough for everything you did for me and Josh. So, here's another "thank you." We were pretty clueless on the process because it was our first home purchase, and you made us feel so comfortable. We love our house! Our summer was sort of crazy, so we're still making it our "home." But its still wonderful even if I still have some boxes here and there. Anyways, I'll let you go because I know you're busy busy! Oh, thanks so much for the fridge! You saved us some money and shopping! Thanks again for everything!!" Julie Calahan
"We were relocating from Pennsylvania to Dallas and had a very short window in which to find a house. We selected online the houses we wanted to see prior to our arrival and Shawn arranged and mapped out three days worth of houses to view. By the time we left we had a house. While still in Pittsburgh Shawn helped us finalize our closing from a far and assisted us with finding numbers to utility companies and or anything we needed. We have moved every year for the past 5 years and this by far was the best experience yet!" Withheld
"Shawn was extremely helpful, efficient and organized. He respected our busy schedules, only requested necessary information and worked well with our schedules to assist us in finding the perfect home." Rick Ybarra
"It was a great experience. Shawn was an outstanding communicator and went above and beyond to make us feel comfortable throughout the process. He kept our best interest in mind at all times and made the purchase of our home the easiest real estate transaction we've ever had. Simply outstanding." Chris Hill
"He worked with me very well and explained how the purchase process works." Withheld
"I can't begin to tell you how FANTASTIC Shawn is! Shawn always had my best interests in mind. He never tried to force anything on me and ALWAYS told me when things weren't up to par. I grew to trust and value Shawn's opinions and expert knowledge of not only the real estate biz but also this neighborhood and the real estate market. I was totally terrified of buying a house by myself, but Shawn was there by my side from the beginning to the end and STILL called to check up on me after we closed. Explaining every step (over and over sometimes) and calming my fears... Shawn was great. Thanks for SUCH a great time Shawn. I'm almost sorry that we're done buying a house! :-) It's been a great pleasure working with you and getting to know you!" Brenda Schumacher
"There were difficult situations that popped up and Shawn was always knowledgeable and available at all times to solve the problem." Withheld
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