Beyond the benefits of security and equity that most people associate with owning a home I would like you to consider some other financial benefits that many people do not really consider. While many people think about the debt and mortgage payment that comes with owning a home there are underlying tax benefits that we hope to make clear for you in this article.

For example:

If you rent a house for $1,000 a month payment it would cost you $12,000 a year to rent that property. $12,000 that you never would see again, plus you don't get credit from the IRS.

If you bought that same property for $100,000 and it cost you $1,200 a month to rent. On the surface it looks like it would cost you $200 extra a month which turns out to be $2,400 extra per year.

Let's look at the reality of this situation.

You are buying a property. When you have a mortgage on a property, you are eligible to take the mortgage interest, which typically will be close to $1,100 a month, as a tax deduction.

So you're looking at $12,000 a year as your interest deduction. That means you can reduce your taxable income by $12,000. If you are in a 35% tax bracket you are looking at about $4,000 of real dollar savings on your income tax just from owning that property.

So with a $4,000 savings... already your payments have dropped from $12,000 a year down to $8,000 a year.

Now let's look at the next piece, which is appreciation. If the house goes up the same as the national average, which is about 6% a year, the $100,000 property will go up to $106,000 in value.

Consequently, you've made $6,000 on your property in one year.

Let's subtract that $6,000 savings from what's left of your monthly payment, which is the $8,000 we mentioned above. Remember, you paid $12,000 for your monthly payment minus $4,000 in your tax saving, minus $6,000 in your appreciation.

Now you're down to $2,000 a year in the cost of purchasing your new home. This is how to assess buying property AND a great way to build a long-term assets.

For the majority of Americans, their home is their biggest asset. If you're renting all your life, you're never going to build that asset.