The Advantages of Home Ownership

With the ups and downs of the housing market, sometimes comes a reluctance to start down the path leading to home ownership.  However, there are still amazing advantages to owning a home, and when deciding whether to continue renting or make the leap to becoming a property owner, it’s important not to overlook what can be gained by a home purchase.

Price Appreciation

The single greatest benefit to home ownership is that as time wears on, the value of the house will increase year by year.  This means that if you do decide to sell in a few years, you will often be able to make a profit.   When renting, the value that the property gains goes entirely to your landlord.  He’s the one who reaps the benefits of appreciation.  Often, your rent may increase in time, so you’re the one who’s paying the difference rather than earning it.

Taxes

When you purchase a home, there are many ways to decrease your tax burden each year, so you can end up paying less to the government each year.  One way is by writing off any interest that you pay on the home.  When you first buy the home, you can also write off loan discount points and origination fees, even the seller is the one who pays them. 

Additionally, once you own your home, there are huge tax benefits to selling.  Assuming you have lived there for two of the past five years, you can make a profit of up to $500,000 on the sale and pay no federal taxes on this money if you’re married.  If you’re single, you can make a federal tax-free profit of $250,000.  If you have made changes to your home that have added even more value than typical appreciation, not paying taxes on this income can save a huge amount of money.

Your Sanctuary

As a renter, there are significant limits to the changes you can make to your home.  Some landlords allow you to paint the walls, but you generally have to paint them back before you move.  That’s not a significant amount of freedom in your own home.  As a home owner, you can make whatever changes suit you.  If your kitchen is too small, you can make it bigger.  You can remodel rooms and update old appliances.  Not only do these improves give your home a personal flare, they also add value if you later decide to sell.

Despite the fluctuations in the market, property ownership remains one of the best long term investments available.  When deciding whether to enter the market, consult with mortgage professionals and a real estate agent who can help you determine what you can afford, find the best possible mortgage for you, and go into a purchase on your best footing, by being pre-approved for a home loan.