According to David Bach, Author of The Automatic Millionaire: "You can't get rich renting. Landlords get rich, and renters stay poor."
"The average homeowner is 31 times richer than the average renter. But even more important than the money is the feeling home ownership gives you. When you own, you have the security that comes from knowing you are building equity and living in a place that belongs to you."
Three Reasons Home ownership is a great investment:
1. You are "purchasing" a house. With most loans, some of the money you pay each month actually goes towards paying the house off. Eventually you will OWN your home, and will not have a house payment at all. The sooner you begin paying, the sooner it will be paid off.
2. Tax Savings — Interest you pay on your home (which is most of your payment in the beginning of your Mortgage Loan) is tax deductible. The government helps pay your housing expense when you own.
3. Appreciation — Homes generally appreciate at a rate exceeding inflation. Since 1968, national home appreciation has averaged 6.3%! An excellent investment by most standards, but even more remarkable when you consider the fact that you are using leverage of "other people's money" to yield that return.
If you purchased a home for $200,000 five years ago, at 6.3% appreciation it would now be worth almost $270,000 today. That's a little better than your bank account earnings.
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