You think it might be time to take a step in another direction. You're ready to buy a home, but you wonder--are there really advantages to owning a home?
Tax Advantages of Home Ownership
- The US government allows tax incentives that make it possible for many homeowners to exceed the standard yearly deduction. Your state may offer the same benefits.
- A tax deduction for the yearly interest on your primary and vacation home. This amount equals a big chunk of your total payments for the first several years.
- You can deduct the total amount of your yearly property tax bill.
- If you refinance to consolidate other debts, the interest on the home equity loan is tax deductible.
Homeowners Have More Stable Costs of Living
- Monthly payments can change if property taxes and insurance go up, but increases usually happen gradually.
- Rental fees can sometimes be more unpredictable.
Appreciation of Your Investment
No one can make any guarantees, but over time most real estate increases in value. If you are careful about your selection, and you treat the home kindly, it will likely be worth considerably more in five years than it was the day you bought it.
Your initial investment may be as little as 3% (or less) of the home's sales price, but you are the one who benefits from appreciation of the property. Not the bank, not the landlord. You.
Your Equity Grows Each Month
Even though interest makes up a good portion of your monthly payment, especially during the first years, the amount paid toward the principal increases each month.
Appreciation and equity work together, helping you use your initial investment to move into a home with more features if that's what you wish to do.
You Are In Control
The house is yours. You are the only one with the power to allow anyone to enter the house to inspect it. Paint it and decorate it in any way you wish. Put nails in the walls to hang pictures and artwork. Bring home a pet without asking anyone if it's allowed. It belongs to you.
Happy house-hunting!
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