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Should you Buy or Rent a Home in Greeley, Colorado?

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I wrote an article about why it is cheaper to buy a house then it is to rent a house in Greeley a few weeks ago. There are many more advantages to buying a home then it being cheaper than renting. When you buy a home you are paying down your mortgage every month, you are getting a huge tax advantage every month and you own the house. You don’t have to ask the landlord for permission to paint, make repairs or have pets.

When you buy a home you are building equity with your payments

When you buy a home you are most likely going to get a mortgage to finance the house (see our home buyer’s checklist for how to start the process). A portion of your payment will pay for taxes, insurance and interest on the loan. A portion of your payment will also pay down the principal balance on your mortgage (unless you get an interest only loan).

The amount of your monthly payment that goes towards paying off your principal may not be a lot in the beginning. The amount is going to be much more than if you were renting since nothing would go towards your mortgage in that case.

How much money would go towards paying off the principal on a house payment?

Banks use a very complicated equation to figure out how much of each payment goes to principal pay off and interest. The easiest way to figure this amount is to visit a site like bankrate.com and use their calculators. They have a great calculator that will tell you your house payment and how much of that payment goes to the principal payoff. If you want a rough idea, a $100,000 mortgage may have $1,500 paid to the principal amount each year. As that principal goes down, more and more of your payment will pay off the principal and less will go towards interest.

What are the tax advantages of owning a home?

The United States government has some awesome tax advantages for home owners. If you are occupying your house as your personal residence you can deduct the interest you pay on your loan. The details can be found here in the IRS website. Not only does buying a home in Greeley cost less upfront money then renting, but the tax advantages could save you hundreds more each month.

Prices historically appreciate in Greeley, Colorado

Prices don’t always go up every year as we saw a few years ago. However, historically prices have always increased given enough time. If you own your home long enough the chances are your home value is going to increase. The best part is that if you live in your home for two years, those profits could be tax free! Prices in Greeley have been increasing significantly over the last couple of years.

How to pay zero taxes when you profit on a personal residence

According to the current United States tax code, if you live in a house as your primary residence for two out of the last five years, you won’t pay taxes on any capital gains up to a certain point. That means you could buy a house for $50,000, fix it up a little, live there for two years and then sell it for a $50,000 profit and pay no taxes on that profit. Please consult a tax professional to understand your particular situation.

Buying houses that are below market value in Greeley

Not only are there great tax advantages, equity pay down and possibly appreciation with homes, but you can buy them below market value. Our team lists many HUD and REO properties in Greeley and the surrounding area. Many times these homes are priced well below market value and buyers can get an awesome deal. When you buy below market value you gain instant equity, which is tough to do with any other investment. Many times these houses need some work, but in some instances they do not.

When you own a home, it is yours

Owning a house may be the biggest advantage to buying a house. When you buy a home it is yours and you can do what you want with it. That is as long as it is legal, you don’t violate any covenants, and you do what you promised to do when you borrowed money on the home.

Owning a home means you can paint it, put in new carpet, put in new lights, have pets and much much more without permission from anyone.

How can you get started buying a house in Greeley?

If you want to buy a home, give us a call at (970) 573-6441! We will be happy to help you find a home and find a lender. Even if to think you may have problems qualifying for a loan, talk to a lender to see what you need to do to buy a house.  Our team lists many homes including HUD and REO listings and we can help you find a great deal.

Ready to talk to a Greeley Real Estate Agent?

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