Top 5 Reasons To Purchase A Home
Being a homeowner comes with many perks. Listed below are the top five reasons I believe home ownership is the way to go!
When you become a homeowner, you open a whole new world compared to renting. You are in complete control, you can decide any improvements you would like to make, and you can decide whether or not you'll have pets on your property. You can occupy the home as long as you please, and you never have to worry about your payment rising if you obtain a mortgage with a fixed interest rate. You can even pay your mortgage off early and only have to pay taxes and insurance on your home. When you become a homeowner, you feel a newfound sense of freedom.
Over the years the property you own will almost certainly see appreciation. Homes appreciated at a rate of 5.4% between 1968-2009 according to the National Association of Realtors. So just by owning, and either occupying your home or turning it into a rental property to hold for the long term, you’re gaining an average of 5% a year compared to renting!
3. Consistent Payment
For people who like to budget and operate on a fixed expense plan: being a homeowner is for you. When you purchase a home on a mortgage with a fixed interest rate, you can almost certainly know your house payment will be the same every month, barring any changes in your tax assessment or insurance.
4. Recapturing Principal/Building Equity
This is a beautiful thing about being a homeowner. Part of your payment every month goes toward your principal on your loan, increasing equity in your home. This process can be likened to storing cash in the bank that you can eventually use or obtain in the future. Of course, when you sell, you will immediately recapture all of the principal you paid over the years, given that you avoid selling in an extremely poor market. Also, you can use that equity in other ways, without even selling your home, such as a home equity loan or line of credit. The point is: when you’re a home owner, you make money and you have options!
One of the most under-appreciated and unknown benefits of being a homeowner is the tax benefits. Whether you're purchasing the home as an investment property or a primary residence, these benefits are significant. Primarily, you can write off all your mortgage interest on your primary residence. This benefit is impacted by the new federal tax plan, which raises the standard deduction (in other words, the portion of your income that isn't subject to tax), but the option is still there if you choose to take it.
The second major tax benefit is that after two or more years of occupying your home as your primary residence, you have the option to sell your property and pay absolutely NO TAXES on your capital gains, which is the amount your home appreciated during your ownership. If you have purchased a property for investment purposes, you also have significant tax benefits, such as writing off all the interest, taxes, and insurance. You can also take out straight line depreciation over 27 and a half years. What do I mean by that? You can take the basis value of the improvements on the land (the house) and divide it over 27.5 years, and deduct that each year on your taxes. To top it off, you can also write off repairs.
There are many benefits to being a homeowner, but these are some of the top reasons that are worth mentioning immediately. So, if you’re interested in taking the next steps toward these benefits, or would like more information, please contact me at any time. I’m ready when you are!