Buying a home is a big step, whether it's something one does for the first time or the tenth. With so many reasons to put off homebuying nowadays (like the ability to rent long-term worldwide while working remotely, the increasing prominence of rental properties in big cities, and higher home prices), it can be tempting to never buy a home or to put off the next home purchase. Buying a home ties people to one place for most of the year- a huge drawback for many who would rather spend most of the year soaking up the sun and setting up their office space in the tropics.
However, there are so many reasons that joining the seemingly exclusive circle of homeowners or investment property owners is a wise move. The great news is that homebuyers can have it both ways: the home of their dreams, like an oceanfront villa on St. John, in a location they love. Moving to St. John can be a reality, as a permanent home or an investment property. Let's discover why owning a home is worth it and why now is the time to buy.
Three reasons to buy a home
It is an ideal time to enter the market
For those who want to put down roots, why not consider buying a home? It's a sensible option if your lifestyle and work support homeownership. Plus, buying a house is even more worthwhile post-pandemic. Due to low inventory, the U.S. has only a third of the homes available compared to a few years ago. As home values continue to rise, there’s a lot of truth to the sentiment that now is an optimal time to buy one.
Homes make money for their owners
Owning a home is an effective way to accumulate long-term wealth. Through regular mortgage payments, homeowners pay off their debt and gradually increase their ownership stake in the property. Homeownership yields more consistent savings than investing and higher profits than merely saving money. Eventually, when a homeowner finishes paying off their mortgage, they have an asset worth potentially hundreds of thousands of dollars.
Many economists argue that renting is cheaper than buying based on the state of the housing market. Homeowners indeed have ongoing expenses such as homeowner's insurance, property taxes, and sometimes HOA fees, while renters aren't responsible.
However, data from the Survey of Consumer Finances shows that the average homeowner has a net worth of $195,400. In contrast, the average renter has a net worth of just $5,400, indicating that homeownership goes hand-in-hand with building wealth. It's easy to understand how homeowners can accumulate wealth by paying for a house over a long period. Renters, though, would have to exercise extraordinary discipline to save what homeowners collect simply by making mortgage payments.
Steady monthly costs
Buying a home can provide stability by eliminating unpredictable housing costs such as lease termination, landlord changes, and rent increases, which can be especially prevalent in urban areas.
Over the years, the cost of renting apartments across the U.S. has steadily increased. The most noticeable rent spikes occur in larger metropolitan areas. As of February 2023, the average monthly cost to rent a two-bedroom apartment is $1,320. However, this amount varies based on where you live. For example, Hawaii has the highest average rent at $1,651, while West Virginia has the lowest at $732. Data indicates that rent is likely to keep increasing.
As a homeowner, you can control most of your monthly housing costs by choosing a fixed-rate mortgage, even though your property taxes and home insurance rates may vary.
Four reasons to move to St. John
St. John is a US territory
If someone buys real estate on St. John, it's like buying U.S. property stateside — the only difference is that they live on a beautiful tropical island. St. John is a United States-held territory, so residents abide by the laws of the U.S., making the living experience on St. John quite similar to the living experience in any U.S. state. An additional benefit of moving to St. John is the ease of travel. The islands are a quick trip by plane from the continental United States, so it's easy to travel between St. John and the continental U.S. to visit family, all without a passport.
Fantastic tax benefits
One economic development initiative in the US Virgin Islands provides an extremely attractive tax benefits package, potentially leading to a 90% income tax reduction with a complete exemption from property taxes (if deemed eligible). The tax benefits alone make anyone want to move to St. John.
Investment properties have a promising future
If prospective homebuyers imagine themselves investing in real estate on St. John in the future, moving to St. John is a perfect fit. As tourism continues to skyrocket in St. John, buyers willing to pay a little more come to the most expensive island of the trio (St. John) for a serene getaway.
Additionally, St. John residents who own investment property there can get significant tax breaks and savings through a 1031 or tax-deferred property exchange when they sell one home, essentially swapping the sold home out for a new investment property (rather than taking any money home from the sale).
Call paradise home
Due to the increased number of individuals working from home, there is a surge in demand for St. John homes for sale. Warm locales offer a long vacation season or a fantastic place to set up a permanent remote office in an oceanfront villa on St. John, making it an ideal place to live.
Make your St. John dream a reality
Over 10% of people in the country buy homes each year. Many of them for the first time, many of them home-buying veterans. Some homebuyers seek a new life in an oceanfront villa on St. John, while others desire St. John homes for sale as investment properties.
This year is the year to buy on St. John. The best investment is always the one made yesterday. If you're ready to buy a St. John home, contact Tropical Properties VI today to open the next chapter in your life.
*Header Photo courtesy of Shutterstock