Here are the top perks that make homeownership a wise investment.
Is homeownership really all that it’s cracked up to be? The answer is yes, and there are several key reasons why a home is generally viewed as one of the most important assets that a person can have.
If you’re like most people, saving money is a constant struggle. The first benefit of homeownership is that a mortgage is like a forced savings account. Making mortgage payments will build equity for your home as it appreciates over time.
Second, a home can be a tax shelter. If you profit off of the stock market or some other type of investment, you’re expected to pay capital gains taxes on those profits. However, the profits you make from the sale of your home are usually not taxable. That saves you more money and gives you a better opportunity to increase your net worth.
Third, the principle and interest will never change over the life of your home loan. Contrast this with rents, which frequently go up—much to the chagrin of renters. At times, renters find themselves paying more in rent than they would pay in monthly mortgage payments on a house.
Finally, according to the Federal Reserve, homeowners have 44.5x more net worth than renters. A 2016 survey by Consumer Finances revealed that the average homeowner has a household wealth of $231,420, whereas the average renter has a household wealth of $5,200. That’s a considerable difference!
For these reasons, buying a home is the smartest way to build wealth in the long run. If you have any questions about this or any other real estate topic, feel free to give us a call or send an email our way. We’d love to chat with you soon.