Landlords can pretty much raise your rent whenever your lease expires and often times by more than you can handle, forcing you to relocate. A predictable home expense will give you stability and control over your housing expense. Consider how much rent costs you over a 10-year period. A $3000/month rental payments will add up to $360,000 over that 10-year period when the same amount of money could have gone toward paying off 1/3 of the debt on a 30-year mortgage!
Owning a home has a high upfront cost, such as a downpayment, appraisal fee, and homeowners insurance. However, over time owning a home is cheaper than renting which is a great benefit.
2. Built Equity through the Forced Savings that Homeownership Creates
One of the greatest advantages of home ownership is the opportunity to built equity. By purchasing a home your monthly payment goes from a liability to an asset. Each monthly payment you are paying down the principle and owning more and more of your home. Depending on local market conditions, expect your home to appreciated steadily throughout time, building your net worth.Real estate moves in cycles, sometimes up and sometimes down.Yet over the years, real estate has consistently appreciated.
3. Make a Place your Own
A huge benefit of owning a home is the freedom and ability to make changes to the home. Homeownership allows you to make your house your own and enables the freedom of creativity. When you are renting a home, it can be difficult to make even the simplest of changes such as painting a room or updating an appliance. Not only does the ability to make changes to a property upgrade your living situation, but it adds to the properties value.
4. Tax Benefits
Many of the expenses of owning a home are actually tax deductible.There is no tax break for renting, while homeowners can claim any deduction for mortgage interest and property taxes.Homeowners who itemize deductions may reduce their taxable income by deducting any interest that they have paid on a mortgage.For example, if you make $100,000 a year and rent a home for $2,500 a month, you would pay taxes on your entire income.But if your mortgage payment for your home was $2,500 a month you would only have to pay taxes on $70,000 of your annual income because of the interest you paid on your mortgage can be used as a tax deduction.
5. Support your Retirement
Investing in a home is unlike a 401(k) or IRA, as you can live in and enjoy your investment while it continues to grow.Additionally, homeownership provides you with the opportunity to borrow money on the equity you have built by paying your mortgage.The longer you own a home, the more it should eventually be worth.Homeownership gives you many options from tapping into the value of the home, whether that be from a reverse mortgage or refinancing.Property ownership is forever and something you can leave on to your future generations.