12 Reasons to Buy a New Home Townhome or Condominium
Modern Materials and ConveniencesToday's new homes include the most advanced products and technology. New homes are equipped with modern appliances and amenities designed to fit the needs of today's buyers. Also, the new technology in building materials has made the homes of the 21st Century virtually maintenance-free.
WarrantyNew homes usually come with warranties on workmanship and materials used. This protection will give you additional peace of mind in making your purchase. When a builder offers such a warranty, it helps establish credibility and demonstrates technical competence, financial stability, and fair dealings with customers. These warranties are generally transferable and provide added value in reselling your home.
Quality of LifeA new home is one of the smartest purchases you will ever make. A home provides shelter as well as a place to eat, relax, and entertain friends. The average homeowner spends more than half of their time at home and as such, homes have an important effect on quality of life.
EfficiencyHomes built today are as much as 50 percent more energy efficient than homes built before oil prices skyrocketed in the 1970s. New homes are better insulated and designed to reduce air infiltration. Additionally, new homes have more energy efficient heating and air conditioning equipment. This results in dollar savings to the homebuyer.
Simple FinancingSecuring financing can be a major obstacle to home ownership. In many cases, the homebuilder has done much of the legwork for you. They have researched the market and negotiated the best rates for their specific type of housing. Many homebuilders (but not all) include closing costs (or a fraction thereof) in the base prices of their new homes.
Investment LeverageA new home can allow you to increase wealth through a process called "leveraging". Suppose you buy a $300,000 home with a $15,000 down payment and a $285,000 loan. If your home increases in value to $350,000 during the next few years (which is easily possible,) you would own equity of more than $65,000 (your down payment plus appreciation and the principal paid down on the loan.) Therefore, you would have earned over a 400% gain in a few years, not even considering your interest and property tax deductions on your federal and state tax returns. Few other investments can earn you so much so quickly.
Tax AdvantageWith a new home, owner occupant taxpayers will not have to pay taxes on the appreciation effectively sheltering investment gains.
Tax DeductionsRecently, tax laws have changed considerably. Even with the changes, a home is still one of the best tax shelters for one's income. Homeowners may still deduct mortgage interest and property taxes from federal and state tax returns. A person in the 28 percent bracket receives the equivalent of a 25 percent discount on mortgage interest and property tax payments.
Tax ExemptionUnder the Taxpayer Relief Act of 1997, capital gains on new home investments are exempt from federal taxes up to $250,000 for single taxpayers and married couples filing separately, or up to $500,000 for married couples filing jointly. This exemption is subject to owner occupancy for any two consecutive or non-consecutive years in any five-year period.
ChoicesThe option to choose location of the lot, the floor plan, interior and exterior decoration enables the homeowner to live with their own personal selections that are fit for their own lifestyle, and not be restricted by the taste of previous owners.
Lower MaintenanceAll manufactured products have an expected lifespan. Daily use, weather, and quality of care play a role in anticipated longevity. Buying a new home will ease the buyer's concern for "How long before it breaks down?" With a new home, the answer is: a substantially long period in most cases.
Compatible NeighborsIn most new home communities, buyers will be moving in with neighbors in generally similar circumstances. The purchase of a resale home in an established neighborhood could make being the "new kid on the block" a more challenged transition.