Question

As a young person freshly graduated from college, one is often facing this question. Use this forum to share your thoughts and learn from others'.

Sam is a newly graduate student. He is weighing on whether to buy a house or rent one. Suppose he earns $50,000 gross income a year and lives close to where you are at. Please help Sam to analyze his choices and make a recommendation to him. To be more specific,

• What are the pros and cons of each choice based on Sam's situation?
• Which choice is more beneficial Sam in a short run? How about in a long run?
• Are there any federal and/or local government benefits that Sam can use should he decide to buy his first house? How about being a first-time renter, will there be any benefits? During the still on-going pandemic, are there any additional benefits Sam can utilize for buying or renting his house?

Answer 1

Advantage of buying a house for young person freshly graduated form colleges.

- A good long-term investement

- building equity

-federal tax benefits

-greater privacy

-stability

Disadvantages

-High upfront cost

-less mobility

-property value can fall

Advantages of have on rent

- rent payment may be lower

- repairs aren't your responsibility flexibility

- low upfront costs

Disadvantanges

-rent may increase

-no credit score improvement

He should buy a house ratherthen chossing a house on rent although monetary aspect to is important as buying a house is after the bigggest financial transaction.

There are the following reason why buying house is more advantageous than living on rent in long run / short run.

1) you do not have to deal with a lanlord

2) emotional security

3) no uncertaninty

4) easy financing options

5) tax benefits on house lease

6) house as an investment

7) building your assets

8) conforming to social norms

Federal benefits can use to decide to buy his first house

1) Mortage interest deduction

2) Property tax deduction

3) home equity debt

4) home office expense ( if you are self empoyed and you use part of your house exclusively and reqularey as your principal place of business)

5) mortgage credit certificate

6) medically necessary home improuement .