Ah! Finally, 2020 is about to end, and we can’t be happier. 2020 was one hell of a year. Social distancing, masks, lockdowns, and whatnot?
But one thing that 2020 taught us is to have your home – the one you call your own, the one you can practice work-from-home from, and the one you can relax yourself in amid tough lockdowns and other situations.
So, let’s welcome 2021 with all the positivity and hope. Here are the top 7 reasons you should build a new home in 2021.
Property value never depreciates
The main reason people invest in real estate is that the value (almost) never depreciates. And this has been true during the pandemic as well. Even the lockdowns and economic recession haven’t been able to put a dent in the housing market.
Going by the stats, property rates have increased two-fold since the last two years. A report published by the National Association of Realtors suggested that the existing home sales hit an all-time high since December 2006. This means that people are still buying and selling homes, even in the pandemic recession.
So if you’re building a home in 2021 intending to sell it later in the future (yes, we know you don’t want to sell it, just in the worst-case scenario), then just know that you’ll never incur a loss.
Mortgage rates are at an all-time low
Contrary to the property value going up, the mortgage rates have hit an all-time low. Since the beginning of 2020, the drop seen in December is the 15th for the year.
Freddie Mac reported that the FRM rates have dropped by one percentage point to 2.59% (15-year FRM) and 3.13% (30-year FRM).
Therefore, banks are offering cheaper rates on mortgage loans. This means that getting financing for building your home in 2021 has become easy.
Since the economy has started to recover, you never know when the price may go back up. So it’s best to build a house in the early part of 2021. The sooner, the better.
Leverage the pandemic sale
Building a home isn’t only limited to plots, bricks, cement, and all those things. You’d also have to purchase carpets, electronics, furniture, and other essentials that make up a luxury home.
The pandemic has forced several consumer sectors to roll out cheaper variants to stay competitive. Not only companies but consumers too are demanding discounts on products.
You can take advantage of this pandemic sale and buy products and materials at cheaper rates for your home.
Save money on rent
If you do not own a house, then you must be living on a rented property. This means thousands of dollars of bills every month. The average monthly rent for an apartment in the US was about $1,400-1,500 in 2017. Factor in the inflation rate today, plus additional expenses like application fee, security deposits, pet deposits, insurance, among others.
By having your own house, you’ll be saving those expenses every month. For example, saving $1,500 every month means you’ll save $18,000 every year. You can reinvest that somewhere else and reap dividends.
Earn money from rent
By owning a house, you create an additional income source for yourself. You can rent out part of your home to a tenant and receive monthly recurring payments from him/her.
Renting out to tourists is also another option. When the travel industry is back to its feet, travelers will be looking for low-cost accommodation options. You can list the rooms on services like AirBnb, Homestay, and Couchsurfing, and get paid.
If renting out to tourists is why you’re building a home, you should consider building a high-end luxury construction as vacation rental property for higher profits.
Receive tax breaks
Almost no one likes paying taxes, especially when it’s in the higher percentages. Real estate is one of the best ways to receive tax deductions in the US. Therefore, many people prefer to invest in them and REITs.
The tax benefits you receive for building a house are associated with:
- Mortgage interest
- Property tax
- Operating expenses
When you combine these verticals, you’ll see that you’re saving a lot of money with tax breaks in the longer term. There are also capital gains to be made when you sell your house in the future.
Get a customized home in 2021
Custom homes are personalized and hence allow you to express your creativity. From the kitchen to the living room, you have complete control over the design. Not only in design, but you also have power from a budget standpoint.
You’ll also realize the value of a customized home when you’re trying to sell. People value creativity for which you can charge more.
There you go, those were the top 7 reasons you should consider buying a custom home in 2021. As the year is about to end, now is the best time to kickstart your 2021 positively and buy a home. What are your views on this? Do you have any questions or want to discuss anything? We are here to help you out. Contact us today!