Why do we have to buy a home earlier?

Why do we have to buy a home earlier?

(Excerpt from Thesis by Brandeis, Institute on the Assets and Social Policy) 

We have many questions such as why do we have to buy a house: Rent is enough because it is much simpler life without hassles. Especially Millennial generation doesn’t like to buy a house, was reported.  I’d like to introduce a report written in 2013 by Brandeis University which was established by Jews funds originally.  The title is “The Root of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide”.  The research has sampled 1700 family of African American and White for 25 years from 1984 to 2009.  The report revealed the difference of assets of between African American and White was $85,070 in 1984, but this difference grew to $236,500 in 2009.  Interestingly, the report found out that one of major contributing reasons is how early they own a home.  White family has purchased a house about 8 years earlier than African American.  And White’s house owning rate is 28.4% higher than African American.   

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Rent or Buy? FHB (First Home Buyer)

한글버전

 For the past few years, housing market has been flat mainly because of credit loss of many potential home buyers being stuck with high monthly mortgage payment. Constrained to financial contraction and unable for new financing had many of household to become renter. Insurgency of many renter prompted demand of rental apartment building. Responses to this new wave of migration had many developers choose to build more rental project than condominium and townhouse.

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1031 Exchange Program

First, what is 1031 like-kind exchange program?
 
When a property owner( or tax payer which I will use them interchangeably, in fact, this topic can be handled by tax accounts in much better way), anyway when he/she accumulated preferably large equity from an investment property and he/she is trying to sell the property, the owner is facing to pay a substantial capital gain tax.  In other words, federal government will impose the tax on the gain between the purchase price while back and current selling price of the property.  However, by IRC( Internal Revenue Code) section 1031, so called “1031 like-kind exchange program”  the property owner can defer this capital gain tax if the property owner is willing to buy other like-kind property right after the subject property has been sold.  In fact, this deferral program works indefinitely because the program can be used repeatedly.  And also it serves as Estate planning opportunities because heirs receive the assets at a stepped-up basis.  

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Landlord and Tenant - Landlord's Responsibility 2

한글버전

 The old who are close to their retirement face financial decision about the real estate asset they own. That is as important as they facing investment decision. In order to be eligible for government benefit, the retiree can choose not to own real estate asset at all. Often the retiree weighs the benefit of not having asset. Of course, it all depend personal circumstance. Other can choose living off from the rental income they receive. We will briefly touch upon Landlord’s responsibility of having Tenant this time.

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