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5 Important Benefits of Homeownership

March 11th, 2019

Homeownership versus rented home: this issue often causes heated discussions. For many of us homeownership is an essential part of adulthood; like earning our own money, investing it and putting down roots.  Just like our parents and grandparents did before us.

Renters might not have maintenance or mortgage repayments, but that money has no ROI (Return of Investment), meaning that those rental payments could have gone toward finally owning a home in the long term.

As this will be one of the biggest financial commitment most of us will ever make, let us consider how we can benefit from homeownership:

  1. Investing in our future. Most other large purchases, a car for example, will devaluate over time and even though the property market has had a few lows over the years; even during these the national median prices of homes has gone up. Always bear in mind that every local market varies.  Each monthly payment of a mortgage bond reduces part of the capital of the loan so that the debt decreases as the price of the property continues to rise allowing you to collect equity for further investment; whether that be in a retirement annuity, a bigger or even a second home.
  2. Tax benefits. The interest paid into a mortgage is tax deductable, especially in the first years when a larger amount of the monthly repayment is toward interest. Private mortgage insurance and purchases related to the home are also tax deductable.
  3. No increases. With a fixed-rate mortgage you will be paying the same amount for its duration. This will never be the case when renting because of yearly escalations. The extra money in your budget allows for other investments.
  4. Home improvements.  Changes can be made to your own home according to your needs and additions and improvements increase its value. Due to equity collected over the years the financing for these alterations will be easier. When renting most people have to move as family needs change which can be financially and emotionally draining.
  5. Benefit Socially. Studies have shown that people who don’t move around a lot have less emotional stress and are more involved with their communities, establish lifelong friendships and don’t need to disrupt the schooling of the children.

Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®

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