One of the most rewarding things I see, as a tax
professional, is when clients and friends come to me for advice about “tax things.”
I’m happy to share my knowledge, and open up my Rolodex for
referrals about many, many things – how to structure your start up, determining
a plan for retirement, understanding the assets you own and the assets you are
planning to invest in, and of course, home ownership.
Now, obviously, I look at all of these from a tax
standpoint. Granite countertops or an
“S-corp” doesn’t mean anything more to me than their actual definition, but
this week, I wanted to share a few things I’ve seen regarding the new home
market in America right now.
It’s HOT! Inventory
levels are low, prices are climbing, and the real reason for it is simple –
there’s simply too much demand. People
are ready to buy and they aren’t willing to wait. Seriously, have you see the price of lumber
lately?
That’s really the challenge right this minute – builders and
remodelers can’t get the supplies they need, and what they can lay their hands
on? It’s at a premium. The result is going to be high short-term
prices and – at least potentially, a drop in home value when supply production
gets back to normal.
So what should you do?
Honestly? If you’ve been thinking
about selling your home – and you have a plan for where you’re going to live –
then now might be a great time to do it.
If you’re in the market for a home, especially a new one, be prepared to
overpay, or to at least pay a premium.
Now, the real world we all live in dictates this: you have to have a place to live, regardless
of where that actually is. If you have
to move, well, you have to move. For
those who are renting and contemplating a home purchase, I’d have to simply say
this: Don’t overthink it - Buy
it!
Why?
There are just too many upsides to owning your own
home. Not only do you get the ability to
write down the mortgage interest (read that, “nearly everything you pay for
the first few years…”), you’ll also be creating equity.
That down payment?
Right there, you’ve got equity in your home. Sure, prices might fall in the short term,
but if you just bought your home, why are your thinking about selling it? It’s kind of a false alarm from that point of
view.
The bigger point in all this is that if you decided to wait
and rent one more year, you’re simply losing money, not some false value based
on comparable home prices in the neighborhood you purchased in. If you’re spending $1,200/month on rent,
that’s nearly $15,000 you’ll spend and never see again this year. Why not put that money into the purchase of a
home?
I recognize that buying a home can be nerve-wracking, but
the truth of the matter is that no one ever got wealthy paying rent. Even if you’re worried about the caliber of
home you can buy, or the buying “budget” you might have, my team and I can help
lift the veil on that, and really, all aspects of home ownership.
NOTHING is more satisfying than the feeling of owning your
own home, and if you’re thinking about it now, even as crazy as the markets
are, I encourage you to reach out and let’s look at the real costs of buying
and what your budget really is – not what some silly app on your phone says it
should be.
I look forward to hearing from you!
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