The age old question of renting vs. buying a home has been discussed at length for many years now. There are some obvious benefits to each, but it is typically a wiser investment to buy a home rather than rent because you can build equity when buying a home; when renting a house, that monthly rent payment is essentially going out the window (or actually into your landlord’s pocket..).
Despite this fact, there are several benefits to renting a home on Long Island. Taxes tend to be very expensive in Nassau and Suffolk county, so renting a home or an apartment is a good way to avoid paying school district and property taxes. If you don’t have children and don’t plan on having any for a while, it may make sense to rent a short term house or apartment to avoid paying the heavy town taxes. While property taxes depend on the exact town you decide to live in, some can get as high as $13,000/year on Long Island. Much of this goes to the local school districts, but parts also go to the Parks department, county police, and local fire departments.
Although property taxes are very expensive on Long Island, buying your own home as opposed to renting is always the best long-term solution, especially in a buyer’s market. We are currently in a buyer’s market, which means it is more financially advantageous for buyers than for sellers. This is caused by supply and demand; there are more people trying to sell their homes than their are people trying to buy. We previously touched upon the high taxes, however it is also important to recognize that any tax you pay on your local property tax will be deducted from the amount of federal income tax you pay. So, if you make $55,000 per year and your property taxes are $10,000 per year, you will only pay federal income tax on $45,000. While this may not seem like much, and in reality it really isn’t, it’s a small benefit to help potential homeowners afford buying a new house.
Other benefits to owning your own home include being able to rent them out; if you decide to buy a home with a legal apartment (either basement, detached garage etc.) you can decide to turn that space into rental income to help pay the mortgage and taxes. For small families or people without children, this is a very helpful option to help pay for the home. In some rare cases, if you are buying a home with an individual in mind that is willing to commit to renting the space, you can have that person sign an affidavit to provide to your mortgage company, stating that you will be receiving rental income thus potentially getting you a better rate on your mortgage. In some cases, this additional rental income could be the difference between getting a mortgage and not getting one at all.
So, when making your decision to rent or buy a house or apartment on Long Island, remember that there are advantages and disadvantages to each method. Choose the method that is most conducive to your particular situation as outlined in the article, and you won’t be dissapointed!