The National Assn. of REALTORS published data last month showing that SLC homeowners gained an average of $238,240 in equity in the past decade. The report added that almost 72% of Salt Lake’s citizens own their own home. This is GREAT if you actually own, rather than rent because it’s like having a savings account that you can draw on or build upon over the years. This is a national trend for homeowner equity and it’s why we as REALTORS try daily to encourage people to buy rather than rent if possible. Besides building equity owning a home has tax advantages as mortgage interest is one of the few write offs the IRS allows for a single or couple without children. That write off can save tens of thousands of dollars each year in taxes! I always suggest for folks who don’t currently own and who file an easy return to take it out and make a copy so you can scrawl on the copy. Then, look for the ‘mortgage deduction’ section of the easy form and add in, say $2500 X12, which might be interest you pay on your loan for a year = $30,000. That alone is quite a deduction and look how it changes what you may get back from the IRS!

Utah has a nonprofit called the Perpetual Housing Fund that wants to turn renters into owners. Federal subsidies (in the form of IRS mortgage interest deductions) have long been used as a vehicle to encourage homeownership for Americans because they’re effective. As the opportunity for homeownership disappears, the majority of the population is being left behind—more specifically, the portion of the population that didn’t get into a home before 2020. Their idea is simply to build apartments and then share in the equity with the renters to save to purchase later. PHF says, “75% of the annual cashflow, asset appreciation, and debt reduction generated by our projects will be distributed into the hands of our tenants. There are no commitments and no time limits. The longer they stay the more they earn—these funds can be used to fund a small business, go back to school, or put a down payment on a property of their own.”

Basically you rent, get a share of the profits of the apartment building and then can use your new found wealth to put as a down payment to buy a condo or home. You could also use the profits in case of a medical emergency or even start a small business. Some of the buildings proposed would be condos and so renters, if they liked the place they lived in might be able to purchase that unit or another in the building. For more information go to perpetualhousingfund.org. If you’re interested in leasing a PHF property, check for more information or sign up to be among the first to know when thier projects begin accepting applications.