Calling a house your own has so many advantages, making the benefits of owning a home perhaps the best investments you’ll ever make.
Buying a home is the biggest monetary investment most people will make in their lives. It can almost seem daunting – those huge upfront costs, the upkeep, even the notion of settling down into one place can dissuade some.
But homeownership is also very satisfying and comforting. The benefits of owning a home, both personal and financial, will outweigh the disadvantages. You now have the ability to build equity and receive tax breaks. Plus, the house and property is yours to do as you wish. You have ultimate freedom to make as many changes and additions as you’d like.
Freedom to Change
Freedom, and especially the freedom to change, is actually something money can buy. Because when you own a home, it’s yours to do with it as you wish. Don’t like the interior paint? Change it. Rather have a flower bed in the front yard? Plant it. You may have some mild rules to follow from the homeowners association (HOA) as far as landscaping goes, but in the grand scheme of things, that’s pretty minor.
For those who value privacy, one of the greatest benefits of owning a home is getting to seal yourself off from the world in your own domain. This is where freedom to change plays a significant role. If you’d rather not see your neighbors, plant trees on the property line. Or hang blinds or build a fence, whatever. Freedom equals maximum privacy if you want it.
You’re likely to stay longer in a home that you own rather than rent, making stability for yourself and your family a major benefit. You’ll also find stability in your monthly payments. A landlord could raise the rent, causing you to look elsewhere, whereas a fixed-rate mortgage keeps your monthly payments the same. Even an increase in property taxes, which only happens maybe every four to five years anyway, won’t change your monthly payment by that much.
Paying a landlord every month is almost like burning money. Sure, you’re getting something in return – a place to live. But when it’s time to move, you may get a deposit back and that’s it.
Equity is the difference between what you can sell your home for and what you owe on a mortgage. Each time you pay the bank, you’re paying down the balance of the loan. This is money (and some!) you will get back when you sell the house. Building equity over time ensures a down payment on your next home. And overtime, owning a home is actually cheaper than renting!
Federal Tax Benefits
When the accountant asks if you own a home and you say yes, they like that. They get to help save you more money that way. That’s because you can deduct the amount of interest paid through your mortgage loan. For the first few years of your mortgage, you’re going to pay mostly interest, which adds up to a nice deduction at tax time.
Today, as many of us rely on our homes for work, you may be able to deduct expenses associated with your home office as well. Be sure to keep track of all work-related expenses going forward.
Rental Income (Airbnb, VRBO)
In this day and age, travelers prefer to stay in an Airbnb rather than a hotel. This has been true for several years. Even if you live in your home full time, you can still make some extra income by renting. Do you have trips planned in the future? If so, you could open your home to travelers coming to your town. This little bit of extra income can pay for a pretty nice vacation!
You’re On The Ladder
Houses, for the most part, appreciate. So you’re likely to sell your current home for more than you paid, giving you the opportunity to buy something bigger or in a more desired location. You’re building equity, you’re building credit, and you’re gaining a good understanding of what homeownership entails. Once you’re on the ladder, the only way to go is up!
When it comes to deciding whether to build or buy your first home, few decisions in life are bigger. Gain the perspective of current homeowners. See what they would have done differently. Find a builder or real estate agent that you can trust to help you through the process. To take it a step even further, should you decide to build a house, well that’s a whole other ball game. In a good way. Then, and especially if you go with a custom home builder, every decision throughout the process will be finalized by you. Let us tell you that there’s nothing like cracking a cold beer and kicking back on your deck at the end of a long day.