Real estate has gradually become a preferred form of investment for most Americans. This is mostly due to the benefits associated with this form of investment. For instance, it provides a form of passive income, which ensures you make generous returns without active work. Real estate also provides stable cash flow and diversifies your investment portfolio, among other advantages. Homeownership is among the real estate investments many people make today. According to Simply Insurance, 65.8% of Americans live in their own homes, which is quite significant. Although the journey to homeownership is exciting, it can be challenging, causing many to second-guess if this is an ideal investment decision. Fortunately, the benefits speak for themselves! Here is a list of reasons why you should consider becoming a homeowner.
1. Real estate increases in value over time
What makes an investment worthwhile? Its ability to make handsome returns! Home values usually increase over time, known as “appreciation.” The longer you keep your home, the higher its appreciation. This means that when you are ready to sell, your home can provide generous profits. Several factors may cause the value of your home to increase. The location of your home is a significant contributing factor to its increased value. If your home is in a safe, well resourced, and friendly neighborhood, the increase in the demand from potential buyers can cause its value to skyrocket exponentially. Another factor that can considerably increase the value of your home is its size and usable space, as well as its condition and age. Therefore, when purchasing the home and ready to resell, consider these factors to ensure you make the most out of your home.
As a side note, when considering the resell value of your home, you must not overlook the role the current real estate market plays on the overall price of your home. Although it may increase, you may not receive as much profit as you anticipated due to the state of the market at the time. With this in mind, you can ensure that you select the right times to put your property on the market or implement effective strategies to ensure your property further increases in value.
2. Offers freedom
Understandably, you have a vision for your living space. Perhaps, you want your home to have aesthetically pleasing walls filled with art, a modern kitchen, a cool themed design for your children’s bedroom, or to repaint the living room. However, if you rent the space, your opportunity to express these creative juices is limited as your agreement restricts you. This, in effect, means you cannot make the space truly yours— because it’s not! Even when you have some freedom as a tenant, you can admit it is never enough. This is why owning your home is a brilliant idea. As a homeowner, you can design and create your ideal living space. You can transform your space to fit the needs, style, and theme you want to showcase. Most importantly, you can take the time to initiate home renovations whenever you deem it necessary. Additionally, you enjoy the comfort and accomplishment of creating a home that fits your dreams and goals.
3. Avoid landlord hassles
There are several benefits to renting. As a tenant, you don’t need to worry about property value, maintenance and repair bills, or associated real estate taxes. Therefore, it is no surprise that about 44 million American households are renters. However, this doesn’t mean renting doesn’t come with its challenges. A common issue of renting is the hassles between landlords and their tenants. You depend on your landlord for several aspects of your living, such as maintenance, repairs, and utilities. This leads to issues between you and the landlord, affecting your experience in the rented home, causing stress and strained relationships. Fortunately, you can avoid this kerfuffle when you’re a homeowner. As a homeowner, you control all aspects of your home. Therefore, you do not need to wait for someone else’s actions to ensure your living conditions and experience are enjoyable. It seems like it’s not so great that you would have to incur your own maintenance, repairs, and other related costs. However, this is way better than enduring the stress of depending on a landlord.
4. Stability from investing in a community
Another benefit of owning your home is its stability for you and your family. When purchasing or building a home, there are numerous considerations you must make. One aspect which plays a vital role in your decision is the location. Therefore, you invest in the community when you purchase or buy a home. Suppose you settle in a neighborhood that has good schools. In that case, you wouldn’t want to take your children away from such an opportunity by moving to another area and restarting. This allows your children to make friends comfortably, as they are certain that these relationships can last over a significant period of time. Likewise, you would be reluctant to leave a community that offers support, where everyone is friendly and knows each other. Investing in the community means you also don’t need to move much. Renters tend to move quite often as they may be looking for better rent prices, the size of their living space is either too large or too small, or due lease. Many of these issues are attributed to the fact that renters are restricted in choosing a rental property. However, you do not have to worry about these issues as a homeowner. This encourages you to keep your family in one place for several years. The stability associated with investing in a community has healthy benefits for your family. For example, your children can do better in school, you avoid issues of uncertainty in your living condition and ensure your family’s safety.
5. Enjoy various tax benefits
When you think of homeownership, you may quickly turn down the idea due to the costs involved, especially regarding taxes. Although you may be obligated to make some tax payments, you also enjoy several tax benefits. In a bid to encourage and assist Americans in becoming homeowners, the Internal Revenue Service (IRS) has made available various tax breaks to help offset the financial burden of buying and owning a home. Some of these tax breaks include home office deductions for small business owners or self-employed persons who use their homes as an office, discount points, and real estate charges. You also get to enjoy mortgage interest deductions which reduce the federal taxes you are expected to pay and the stress associated with increasing interest rates. A tax credit is another tax benefit you enjoy when owning a house. With a tax credit, you can subtract an amount of your taxes, decreasing your accrued owed tax or increasing your tax refund. Additionally, various laws have been passed to further assist with your home buying and owning process. For example, the $25,000 first-time home buyer grant application process, (which is yet to be passed and implemented under the Equity Act), will allow first-time homeowners to receive at least $15,000 in tax credit and help finance their home purchases. These benefits are hard to ignore.
6. Save money
Many agree that owning your house can help you save more money in several ways. For instance, you stop paying rent, and your mortgage payments can be seen as part of your investment that promises a future profit. Additionally, more often than not, your monthly mortgage repayment could be less than the monthly rental value. Another way you can save money on a house is by building equity. Equity is the amount of the property you own, which can increase when you pay your mortgage or the market value of your home increases. With equity built into your home, you can save money and the peace of mind to carry out other financial obligations. Purchasing and owning a home can help you save money by making you eligible for tax deductions and credits (as mentioned earlier). You also save more by finding more sustainable ways of financing the purchase.
7. Living security
Renting may seem like a cheaper option; however, it isn’t without several disadvantages. A common one is the lack of security. The truth is, you cannot tell what your landlord could do! One minute, you may have a roof over your head. The next minute, you need to frantically look for new space as your landlord may decide to no longer rent the space. Or, there may have been a change in ownership. In this regard, owning a home is a better option! With your own home, you have the luxury of providing you and your family the security of home. You also ensure emotional security as you and your family are guaranteed to have a space they can call home and be safe in it.
So, there you have it! If you are contemplating purchasing a home, these few benefits should encourage you to go with it! Be homeowner today to enjoy the financial, emotional, and mental benefits that come with this decision.
