I just wanted to give you a little bit of insight into the value of owning your own property.  Owning a property, although sometimes on the surface may appear to be more expensive, actually is a much better deal.

Let me give you a example.

If you bought a house that was $100,000 that had a $1,000 a month payment it would cost you $12,000 a year to rent that property.  $12,000 that you never would see again, plus you don’t get credit from the IRS.

If you bought that same property for $100,000 and it cost you $1,200 a month to rent.  On the surface it looks like it would cost you $200 extra a month which turns out to be $2,400 extra a year.

Lets look at the reality of this situation.

You are actually buying this property so if you have a mortgage on this property, you are going to be able to take the mort~gage interest, which typically will be close to $1,100 a month, as a deduction.

So you’re looking at $12,000 a year as your interest deduction.  That means you can reduce your taxable in~come by $12,000.  If you are in a 35% tax bracket you are looking at about $4,000 of real dollar savings on your in~come tax just from owning that property.

So with a $4,000 savings… already your payments have dropped from $12,000 a year down to $8,000 a year.

Now lets look at the next magic thing, which is appreciation.  If the house goes up the same as the national average, which is about 6% a year, the $100,000 property will go up to $106,000 in value.

So, you’ve made $6,000 on your property in one year.

Let’s subtract that $6,000 savings form what’s left of your monthly payment, which is the $8,000 we mentioned above.  Remember, you paid $12,000 for your monthly payment minus $4,000 in your tax saving, minus $6,000 in your appreciation.

Now you’re down to $2,000 a year in the cost of purchasing your new home.  This is a great deal and a way great to buy property AND a great way to build a long-term asset.

Most people’s biggest asset is their home and if you’re renting all your life, you’re never going to build that asset.  I know my parents walked away from retirement with a beautiful asset… their own home.

I also know that several friends of theirs, who didn’t own their own home, didn’t have that asset and are only living on Social Security now… which barely covers their rent.

So this is a big and important asset that you should be purchasing for yourself.

By buying these properties “rent to own,” you are getting that much closer to actually having your name on the deed of that property.

Anyway, I just wanted to give you the heads up on what it really means to be a homeowner beyond just the value of owning a home for your family. There is great value, financially, for everyone in owning their own home.