Owning a home is a significant life milestone and often viewed as a critical factor in achieving the “American dream.” Since current housing conditions favor sellers over buyers in numerous markets, you could feel discouraged about the prospects of achieving your dreams now.
Don’t despair! This is an excellent time to remember the many benefits that homeownership can bring to individuals and communities.
1. Price appreciation.
Real estate prices move in cycles but have consistently increased in value, making homes a solid longterm investment.
Also, many investors view homes as a hedge against inflation. During inflationary periods, the cost of the goods and services that you purchase will rise, but so will the value of your home.
2. Forced savings.
Monthly rent payments help your landlord, not you, own property. With a mortgage, part of your monthly payment goes towards building equity ownership in your home.
Down the road, homeowners can tap into these savings with a home equity loan. Or, they can help you afford a different home as your needs change, especially when you combine the equity you’ve built with your home’s price appreciation.
3. Tax advantages.
Several aspects of the U.S. Tax Code favors homeowners. Mortgage interest and property taxes, for example, are deductible expenses, although it’s always best to check with a qualified accountant. Since the 2017 Tax Cuts and Jobs Act went into effect, you might save more by claiming the higher standard deduction.
If you sell your home, you take up to $250,000 ($500,000 for a married couple) in profits without owing capital gains tax, as long as you’ve lived in your home for two of the past five years. And if you don’t qualify for the capital gains exclusion, you might be eligible for other preferential tax treatments.
Rent prices can increase each year, but a fixed-rate mortgage gives you better control over future housing payments.
5. Make it yours.
Pride of ownership and creating YOUR space may be the single most attractive aspect of buying a home instead of renting. Paint the walls whatever color you like. Pound holes in the walls for fixtures, artwork, and window treatments to your heart’s content. It’s your home, and you make the choices!
Of course, when it comes to expensive remodeling decisions, it’s also a good idea to be smart about the decisions you make. Some upgrades are more likely to provide a better pay back than others.
6. Join a community.
When you pick a home, you’re also selecting a community. It’s an opportunity to build vital relationships and feel connected beyond the four walls of your house.
7. Security and privacy.
The recent health crisis has taught us much about the value of feeling safe and secure in our homes. Even in “normal” times, we all need places where it’s easy to rest, relax, and recharge.
Ready to Find YOUR Home?
If you’re searching for the perfect place to call “Home Sweet Home,” make sure you have a qualified real estate professional by your side.