Hi ActiveRain!
I'm Cordi, a comprehensive financial planner and owner of Favored Financial Planning.
I'm looking forward to diversifying (a little investment humor there) the topics in the ActiveRain community!
As a financial planner, I view home ownership and/or real estate as an essential component when approaching finances and an important consideration in a client's overall financial position.
Real estate:
- Helps to protect against inflation; especially for those who purchased a home or refinanced a mortgage at 2% - 3% for 30 years.
- Provides long-term leverage. Those who purchased a $200,000 house with a 20% down payment of $40,000 received a 20% return ($8,000) on the home. That's if the home only appreciated at 4% per year; which is about half the current rate of appreciation!
- Is a tax-free return on realized gains. Under current tax law, realized gains of up to $250,000 (single) or $500,000 (married) are tax free! Assuming other conditions are met.
- May be tax-deductible depending on your other itemized deductions. While the current standard deduction limits the deductibility of mortgage interest; having student loans or individuals charitably inclined may still benefit from having mortgage interest.
Of course, there is also the enjoyment of home ownership that you can not place a dollar figure on.
That brings up a sore topic for me and a future blog post - "Renting the American Dream!" There is no string of words put together that makes me sadder.
I hope you'll follow along as I add some diversification to the ActiveRain Community! (You'll find that I tickle myself as I write, hopefully, it will remain undetected to the untrained eye! ;)
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