Home buying is not for everyone but it could be a good idea for you. Let me show you some of the key benefits to owning a home so that you can decide for yourself if it is right for you.
Homes Build Equity
This is the main reason that most people buy a home. They want to stop throwing away money on rent and build some equity.
You can almost think of your home as a giant piggy bank. Every month that you pay rent, you throw a few hundred more dollars in it. Next thing you know, with appreciation, you will turn around and have tens of thousands of dollars of equity in it.
Homes Give You Roots
The security of a home allows you to finally plant roots. When you rent, you are often at the whim of the landlord. They could decide to sell the property that you love in or they could raise the rent 600 dollars all of a sudden forcing you to move.
When you own a home, you know that you have the ability to stay in an area for a long time. This allows you to build some stable friendships and if you have kids, it allows them to stay in the same schools. The stability for children is particularly important because frequent changes can be tough on them.
Homes May Be Cheaper Than Renting
This is not always true in every situation, but more often than not, it eventually becomes true. If it is a hot rental market and you are putting 20 percent down on a home, the home could be cheaper than rent straight away.
If however your home is more expensive that a rental, you can be assured that this will not always be the case. Your mortgage payment will, more or less, always stay the same. There will be adjustments for property tax change but these will usually be minor. Rent, on the other hand will always go up.
Eventually, that mortgage payment will be cheaper than what you could rent something for. As an example, in my part of the country a two bedroom apartment could be rented for 1000 dollars a month 10 years ago. That same apartment now rents for $1700 to $1800. The rental rate has almost doubled in ten years. Rent will always rise.
It Would Be Your Home
It is nice to own a home. Pride of ownership is a real thing and owning makes you feel muc more like you have “made it”.
In addition, because it would be your home, you could do with it as you like. Landscape it the way you want, paint it the color you like and basically make any changes you wish to personalize it.
There is nobody there telling you what to do, so even get a dog, it’s your call when you own a home.
A Home Is A Tax Free Investment
When you sell your home, you get to keep a huge chunk of the profit completely tax free. As long as you have lived in your home for two of the last five years, you can exclude 250,000 dollars of the profit from taxes as a single person. If you are married, you can exclude 500,000 dollars.
Live Where You Want
When you own a home, you can pretty much live wherever you want. If you rent, you have to go where the rentals are. If you rent a house, they are not always available in your price range or at all in the city you want. If you rent an apartment, they are often located in clusters in specific areas of the city.
Buy a home and you can live in the specific part of the city that you want.
You Can Borrow Against A Home
Once you have equity in your home, you can borrow against it. A Home Equity Line Of Credit or HELOC is a very nice thing to have. It gives you a cheap way to borrow money and it is a revolving account. It is like a high limit credit card with very low interest.
You can use your line of credit for anything from updating your home to taking a vacation to paying off credit cards.
Tina’s Last Word
As you can clearly see, there are many reasons that home ownership can be a good thing. Although all of the reasons might not apply to you, if just a few strike a chord, perhaps you should give a home purchase some thought.