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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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Pat A. Tracy McKnight Real Estate is the best!  Tracy did everything that came up to make my deal go through.  We had several problems to solve and Tracy was always available to make suggestions and help solve all of them.  The house needed some repair and Tracy obtained several bids for the best price.  The contractor backed out so Tracy found someone else.  Then we had an easement problem which I solved with Tracy's help.  He was always courteous and willing to help.  He is the best.  500 N Maine Street, Gladewater, TX 75647

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Customer Reviews

J. Garner,  I can not say enough good things about Tracy and Darrell.  They showed my property numerous times over the 3 year period it took to sell my property.  They ran ads in numerous papers in East Texas, including the Dallas Morning News and other papers.  They were very nice and kept me informed all the time. 

When you and your family decide to buy a house, my family strongly recommends Tracy McKnight.  You will never find anyone who is as patient and friendly.  Tracy will treat you as family.  We have had nothing but fun in the home buying process while working with Tracy McKnight.  He is truly a genuine person and will do everything possible to make the experience of home buying great! A and J Hernandez

Pat A. Tracy McKnight Real Estate is the best!  Tracy did everything that came up to make my deal go through.  We had several problems to solve and Tracy was always available to make suggestions and help solve all of them.  The house needed some repair and Tracy obtained several bids for the best price.  The contractor backed out so Tracy found someone else.  Then we had an easement problem which I solved with Tracy's help.  He was always courteous and willing to help.  He is the best.  500 N Maine Street, Gladewater, TX 75647

 

JOHN AND MARY JANE S. - "We would like to express our appreciation for Mr. McKnight helping us find our house in a great location in Longview, Tx. Being out of town he was so helpful keeping us informed as to what was available.  When we would come here he was always available to show us the houses.  We are glad to recommend Mr. McKnight to anyone planning to buy or sell their house." 

 E. and M. Stephenson "I can honestly say that Tracy McKnight Realty was above and beyond my expectations on sales and service.  Everything was done in a non-pressure attitude.  He never tried to push anything down our throats and was more than willing to show us several homes.  He even went the extra mile and helped us with inspectors and etc.  After the sale was complete he checked back with us to make sure everything was okay.  During the transaction period he made several trips to our shop in order for us to sign documents.  Courtesy, dignity, and honesty is my opinion of McKnight Realty.  They make you feel like you're the only customer when dealing with your business.  They seem like part of our extended family.  Would and will do all my realty business.  Also would refer anybody else to them."

Randall and Michele D. - "Tracy went above and beyond for us as we were looking to sell out house.  Once sold he then went above and beyond helping us buy a house.  A lot of late texts.  He always answered any questions.  We will definitely use Tracy again if we ever sell or buy another house. "

This is to express our heartfelt appreciation for your helpfulness, efficiency, and cooperation during the purchase of our new home.  Throughout the process you constantly kept us informed of all developments.  It was a pleasure to do business with you, and I happily recommend you to anyone seeking a real estate agent.       Cheers,  Bill and Wendy

Thanks for everything you did for Deb and I.  After losing my easement, you stood by me.  Thanks again Tracy.  Phil and Deb R. 

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