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How long will you keep
throwing money away on rent? How much have
you made by renting in the past five years?
How much will you make in the next five years
if you continue to rent? Over the last twenty
five years, the price of an average home in
Austin, Texas increased by 240%, or slightly
less
than 10% per year.
When you buy a home, much of the closing cost is tax deductible. On a $150,000
house, expect to deduct about $1,500.00. The interest you pay each month towards
your mortgage is
tax
deductible
as well.
On
that $200,000 home
at 6 percent interest, that’s a deduction of around $9,000 in the first
year.
Property taxes are also tax deductible. For that $150,000 home, property taxes
should be a little under $3,500.00
a year. So, if your household income is $40,000.00, and you're
in the
20% tax
bracket, you would write off a total of $15,500.00, and put $3,100.00 ($15,500
X 20%) back in your pocket! Add that to the average appreciation of your house,
roughly $15,000, and you are making- or saving - about $18,000.00 a year by buying
instead of renting! Do you still think that you can’t afford to buy a house?
The truth is that you can’t afford not to!
The figures used here are based on statistics taken from the Texas A&M Real
Estate Center data and from the Austin MLS, and are believed to be accurate.
No guarantees are implied, and none should be inferred. Information given here
should not be construed as financial advice, and it is recommended that you consult
with your financial professional regarding your individual situation. |
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