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Buy a Home

Buy a Home. You Can’t get Rich Renting. Benefits of Home Ownership. Equity A portion of your money goes towards owning the property. A portion of your money goes towards interest. Earlier, more money goes to interest. Later, more goes to equity. With renting, no money goes towards equity.

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Buy a Home

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  1. Buy a Home You Can’t get Rich Renting

  2. Benefits of Home Ownership • Equity • A portion of your money goes towards owning the property. • A portion of your money goes towards interest. • Earlier, more money goes to interest. Later, more goes to equity. • With renting, no money goes towards equity.

  3. Benefits of Home Ownership • Appreciation • The value of your home will generally go up (on average, about 6%/yr) • Some areas go up quicker than others • Renters only have assets that depreciate

  4. Benefits of Home Ownership • Taxes • The interest that you pay towards home ownership is tax deductible. • The tax law of 1997 • Capital gains up to $250,000 (for singles) or $500,000 (for couples) is tax free • Must live in home 2 of last 5 years • Can take as many times as possible • Do not have to move up to take advantage of it • No tax benefit for renters

  5. Benefits of Home Ownership • Payments are finite • Generally mortgages are for 30yrs • Payments can be fixed • They can also adjust with the interest rates • Rent is infinite • Rent goes up and up and up

  6. Benefits of Home Ownership • Pride of ownership • Flexibility to customize living space to fit your needs • Make the home work for you • Save gym costs (workout room) • Save on grocery bills (garden, pantry) • Save on storage costs • Save on entertainment • Save on other things (with workshop) • Renters have rules they must adhere to

  7. Owner-Building • www.ownerbuilderbook.com • If done right, quick means of building valuable equity • Use the tax law of 1997 to your advantage to build wealth rapidly • Use process to make extra income

  8. Owner-Builder Example

  9. Owner-Builder Example #2

  10. Owner-Builder Example #3

  11. Other options for home owners • Rent the home instead of selling it. • Start a business in the home • Build the homes every year (you’ll have to pay the taxes) Questions?

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