Why Should I Own A Home?
Here are 6 reasons why owning a home can be beneficial.
Pride of Ownership
Your house is your home and it should be your place of peace and rest. It represents stability and security and an investment that can be passed on to loved ones. And it’s your home so you can choose if you’d like to change the paint color or update the kitchen. You don’t need permission from a property manager to have a dog or hang decor. This also means privacy - no one will need to enter your home unannounced to check on the building’s roof or turn off the main water line. Plus, your neighbors won’t hear your children’s morning meltdowns or the music you may play a little louder when you need an after-work boost. Ahh, deep sighs of relief right there for many of my clients coming from apartment living!
Appreciation
Doesn’t it sound fantastic to build wealth rather than watch your money disappear as your landlord pockets it each month? As you pay down your mortgage, you increase your equity in your home. Real estate hasn’t always increased in value (remember 2008?) but historically you cannot find a 10-year period where you would have lost money in real estate. Over the last several years, the market has consistently appreciated anywhere from 3-8% per year on average depending on the neighborhood and some other factors like the proximity to high-quality schools, strong community and get this - Starbucks! And down the road, if you’d like to make improvements on your home or maybe need extra cash for an emergency, you can take out a second mortgage because you’ve earned that equity - that cash is yours if you need it.
Cheaper Than Renting
On the outset, owning a home is a big expense as you account for down-payment, closing costs, furnishings, appliances, etc. But in the long run, it can be cheaper when you calculate a mortgage payment with 20% down with today’s current 30 year fixed interest rates versus renting over the same period of time. (This is information based on specific factors that must be discussed and evaluated with a mortgage professional). Mortgage payments don’t deviate much unless you decide to refinance or change your loan type or length (if escrow is attached to your mortgage payment, there can be fluctuation due to property tax changes or dropping private mortgage insurance, etc). With this steady monthly payment, there is more opportunity to budget, pay your bills on time, pay off credit cards/debt, save and invest in retirement. So now you’re not losing that money to rent every month and you’re increasing your net worth!
Tax Deduction
Your mortgage interest, property taxes, private mortgage insurance, and many energy-efficient additions are tax-deductible. This means more money in your pocket rather than Uncle Sam’s! Plus, if you lived in your home for 2 years and then sold it, you’re excluded from specific capital gains tax depending on if you owned as an individual or married couple. Another perk if you plan to move at the 2+ year mark.
Stop Moving
Speaking of moving - owning can prevent you from moving if it means you’re relocating due to monthly rent increases. But ownership does more than that, it creates a desire to put down roots, make an investment in your community, get to know your neighbors, and make friends as you’re on the sports sidelines with other parents cheering on your kids. When people and places become familiar, there is a sense of belonging. We’re social and relational beings that long for interaction so having your barista know your name at your local coffee shop or waving to your neighbor as you leave for work is good for the soul. Plus, studies have shown that kids do better in school and are less likely to have behavioral problems when they have stability in their home which includes living in the same physical location.
Turn Your Home into a Rental
Maybe you’ve reached a point in life where you want to spend half the year in another location. You want to keep your home, but the cost of ownership means you need to offset it if you plan on buying a second home. Or maybe you just want to move to a different home but want to hold onto your existing property. Turn this home into a short-term or long-term rental depending on your current situation. Make some cash on a property that would otherwise sit unoccupied half the year, or maybe cost a lot to update prior to selling. If you live in a college town, near a military base, are privileged to have an excellent school district nearby, or close to a popular vacation destination, your home could become an excellent investment property or a lucrative short-term moneymaker depending on your desires.
If you’d like to discuss the opportunity of buying a home or the specific factors of how owning a home could benefit you, I’d love to chat with you. And, I am always available to talk about all your other real estate questions and concerns, so reach out so we can set up a time to connect!
https://www.thebalance.com/eight-reasons-to-buy-a-home-1798233
https://www.creditdonkey.com/why-own.html