Why you should own your home!
The benefits of home ownership!
ANYONE can invest in real estate. That's important to note because some people never consider home ownership because they think they can't do it. "I have too much debt...my credit isn't good...I don't have enough money..." I've heard it all before.
The truth is, anyone can invest in real estate. Even if real estate may not be feasible right now in your life, there are reasonable steps you can take to get there. Before I purchased my first home, I was paying $1,200 a month for a small studio apartment outside of Washington D.C. Every year I was paying $14,400 for an apartment I hated. It flooded often, there were pest issues, management was inconsistent, and the location was not ideal. It was as if the $14,400 a year was just money down the drain. That was when I decided to purchase my first home.
Purchasing a home is one of the most important financial decisions an individual will make. If the location is strategic and you choose a good property, you may even be able to one day sell the home for a substantial profit. According to the 2019 Survey of Consumer Finances, The Federal Reserve Board’s triennial survey, the median homeowner has a household wealth of $254,900 compared to $6,270 for a renter.
Let's further take a look at some of the benefits of real estate and homeownership.
One of the greatest benefits of homeownership is the equity you build in your home. Equity is the difference between what you owe on your home and your home’s current value. For example, if the value of your home is $150,000 and your mortgage (what you owe the bank) is $120,000, then you have $30,000 in equity ($150K - $120K).
There are also numerous tax incentives. The law really works in favor of home owners. For example, homeowners can deduct interest and taxes paid on their tax return, which can save a significant amount of money. Homeowners meeting certain requirements may also be able to avoid paying taxes on any profit from the sale of their home.
You acquire something of your own. Owning a property, your own unique place where you can always return, is a dream of many. And no more pesky landlords! Also, you can make all the repairs and modifications you want. Each person would like to build their house according to their tastes or modify the one they already have, which is not always possible with a rental agreement.
Finally, you are not going to pay your whole life. When you rent, you will essentially be paying rent forever and the home will never be yours. However, with buying you eventually pay off the house and will no longer have to make payments to the bank. Most common mortgage terms are 15-year, 20-year, and 30-year mortgages.
Buying vs. renting is an age old question that we have all pondered at some point! Remember, that the choice is yours. Buying has so many upsides but also requires more maintenance and can be more expensive in the long run. So whichever you choose, examine the pros and the cons and see what works best for your needs!
