Santa Monica Real Estate – Great Advantages of Owning a Santa Monica Home    by Shawn Shayestehfar

in Real Estate / Buying a Home    (submitted 2011-12-21)

If you've been undecided about homeownership, now is the time to consider a leap! Don't let the negative press deter you from one of life's greatest joys. Take a look at several reasons that homeownership is fantastic!

Ownership: Obviously, homeownership means you "own" your property. That provides you with some remarkable benefits, though! You're able to remodel, modernize, paint, and decorate to your heart's desire. You may plant trees, put in a pool, expand the deck, or do your own decorating. Essentially this is your home and you should modify it to your style. Most renters are bound to similar walls and carpet that is common apartment decor for many years.

New relationships with your neighbors: Renters often see their neighbors appear and disappear quickly. Many people sign one year leases and some remain in the neighborhood for much shorter terms. Rental complexes also generally have less common shared space for neighbors to get to know each other and socialize. However, homeowners have yards, walking trails, or community pools and clubhouses where they are able to get acquainted with one another. Neighbors live there considerably longer. This implies longer time to create relationships. Studies have revealed that individuals with healthy relationships have more happiness and fewer stress.

Equity built in your home. While you pay rent, you simply won't see that money again. It goes to your landlord's bank accounts. Yes, purchasing a Santa Monica home will come with a bit of significant initial costs (down payment, closing costs, inspections), however, you will certainly make that cash back over time in equity. Traditionally, homes appreciate by about Four to six percent annually. Some areas are nevertheless experiencing normal appreciation rates. For those areas which have seen harder times since economic downturn, experts believe that the real estate market will recover. Homeownership is mostly about building long-term wealth. A house bought for $10,000 in 1960 is probably worth significantly more nowadays.

Tax Deduction: Of course this is one of my personal favorites. As many of you may know, the annual interest payment that you make is deductible from your income. Many people make this mistake by assuming that their monthly mortgage payment is deductible but it is only the interest payments and not the principal. For example, if you get a $1M loan with 4% interest, your first year interest payment is about $37,000 to $38,000. You may pay more than that per year but that's the amount you can deduct from your taxes. And of course as you pay your mortgage, this interest deduction amount will decrease since more of your payment goes to your equity. Also, at this time, you can only deduct your interest up to $1,000,000 loan amount. There have been discussions in Congress to lower this amount to $500K however, for now, it is still $1M.

Predictable expenses: Well, assuming you have a fixed-rate term in your home loan it's predictable. The majority buying Santa Monica homes today understand that a fixed-rate certainly is the best option. Meaning your mortgage payment amount is fixed for the life of the term. For example, If your house payment is $4000 today, then it will still be $4000 per month in 7, 10 or 30 years from now. This offers potential homeowners to budget and create sound financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership generally carries a predictable table of expenses. Including the big and luxury Santa Monica home purchases are predictable. For example, you are aware that most water heaters last just 10 years or your cost of pool cleaning is $200 per month. You understand on a yearly basis, you'll spend money to take care of your heating/air conditions or pay for your home insurance and so on.

Excellent Deals: It's really an excellent time to acquire Santa Monica home. Mortgage rates are at historic lows. We're talking 4.0 percent as opposed to 6.0. This suggests big savings for today's buyers and of course more buying power. Home values also have been down compared to few years ago, meaning homes become more reasonable than previously. For those who have steady income and funds for your down payment, then you'll want to speak with your local Santa Monica Realtor in regards to what homes can be quite suitable for you.

About the Author

Shawn Shayestehfar is a Santa Monica Realtor and managing broker of Platinum Capital Realty, a discount real estate brokerage firm specializing in Santa Monica real estate including Santa Monica homes, condos and multifamily properties. You can search for properties on our site and we refund 50% of our buyer commission to you when you buy with our firm. To learn more about our real estate brokerage services or find out how we can help you sell your property with reduce realtor commission, please call us at 1-877-900-FLAT.