Owning a home is a big decision that has numerous benefits. First, it can be an immensely rewarding experience for the rest of your life. For instance, it can help you build equity, which is your stake in the property and its value. Second, you can deduct the mortgage interest on your taxes and build long-term equity if you pay more than 20% of your monthly income on housing. Thus, buying a house can be good for your long-term financial planning.
However, before committing to such a responsibility, it’s important to understand all the benefits and disadvantages of owning a home. It comes with obligations and financial commitments that can feel overwhelming at times. With so much to consider, it’s natural to wonder if it’s the right time and place to purchase a house.
Whether you are buying your first home, second home, or beach house, there are many good reasons why you should invest in owning a home. Let’s explore some of the top benefits of owning a home below.
Cost Control
Owning a home can be quite expensive, but it’s financially better in the long run. One of the major benefits of owning a home is having stable monthly payments. However, that is not the case when renting a property. It’s plausible that your monthly rental fee can change anytime, depending upon the landlord’s discretion. In addition, it could change year to year or upon the renewal of your lease agreement.
The deposit, appraisal fee, and home insurance are a few expenses associated with purchasing a property. Although buying a home initially costs much more than simply paying a landlord each month’s rent, the long-term benefits of owning a home make it a more attractive option.
With a variable-rate house loan, for instance, you might have access to a redraw facility or an offset account, or you might prefer the security of knowing your monthly repayment amount with a fixed-rate home loan.
If one were to compare a rental home and the mortgage payment on a comparable home in most cities throughout the world, the price of ownership is usually far lower.
A Chance for Equity
One of the most frequently used words you will probably hear when people discuss real estate and home ownership is equity. Consequently, among the most often asked questions by prospective home purchasers is “what is equity.”
Equity in real estate is the estimated market value of a property without any liens, such as mortgages, that may be placed against it. A lien is a claim or legal right on property frequently pledged as security for debt repayment. For example, a creditor or a court order could create a lien. An underlying commitment, such as debt repayment, is guaranteed by a lien.
The principal balance of any liens will be reduced the longer you hold a home. That is because equity increases as liens on a property are removed and, ideally, as the property’s value increases. One of the major benefits of owning a home is the ability to accumulate equity.
A Solid Investment
When it comes to investing, there are numerous alternatives, and owning a home is the epitome of these wise alternative investments. Moreover, a home is a significant investment since it offers a considerably better return than any other major expenditure, like a car.
Depreciation starts once you drive the car off the dealer’s lot after buying it. Owning a home offers the opposite because real estate frequently increases in value depending on regional market conditions. Nevertheless, even in proximity, real estate markets vary, so it is essential to know what to anticipate in terms of future appreciation when you purchase a home.
Improved Stability
People living in a house or apartment often relocate to different locations. Furthermore, people rarely stay in the same apartment or condominium for five, ten, or fifteen years. Thus, owning a home increases your and your family’s stability.
Even if you just set up the furniture, you don’t have many options if the landlord demands you to leave the property. Afterward, there are still many things to get used to, such as getting to know a new area, putting up with noisy neighbors, garbage disposal schedules, and many more.
Even if it is tough to foresee where you will be in a few years, you need to be reasonably confident that you intend to live in the house for a considerable amount of time if you buy one.
Freedom to Personalize
One of the main benefits of owning a home is the complete freedom to personalize the place. You have total control over the initiatives or renovations you want to undertake when you own the property. For example, you can refurbish or redecorate the house in any way you choose, as long as the changes are not against the homeowners association or the local government.
When you own your own home, you have unrestricted creative freedom. So, you can renovate the bathroom with a spa-like theme or paint the walls in your favorite colors without worrying. Every peso you spend on your home can increase its value and will be money in your pocket when you sell it. Hence, home upgrades often raise a property’s value.
An Inherited Investment
Having a home means you will have something to leave behind. Many property owners have a deep passion for their homes, to the point that they insist it remains in the family. So, having something to display all your blood, sweat, and tears throughout the years ain’t that reasonable.
If you rent a property, you don’t have something valuable that you can share with your family. Thus, it is imperative to have something to leave for your kids and their soon-to-be family.
Your home could be a legacy you will pass down to your descendants. Hence, a significant investment. Moreover, it is much more rewarding to be able to look after the people you care about, even if you are not with them anymore.
You Can Have Some Pets
Do you enjoy owning pets but wish you could have an energetic husky or playful golden retriever instead of a hamster? When you own a home, you can have as many pets as you like without anyone imposing size restrictions or forbidding animals from your residence.
In some condominium units or rented houses, pets are not allowed. This could be due to the neighbors or the environment around your area. Even if allowed, pet animals are restricted to small furballs that can only stay inside the house.
You can take care of as many pets as possible in your home with an ambient area. Moreover, you can also take care of exotic pets if you wish.
Conclusion
Owning a home has several benefits, most of which surround the fact that it is an asset. A positive aspect of home ownership is pride in possession and community involvement. Moreover, many buyers have a sense of pride in both their home and their neighborhood. Most importantly, paying a mortgage builds your equity in that asset.
Home equity, also known as fair market value, is expected to rise over time based on the real estate market and any improvements you make to your house. Thus, owning a home can help you raise your wealth and assets. In addition to tax benefits, owning a home can help people save money and feel more financially secure about their future.
Whether you’re looking to buy your first home or another property, it’s essential to understand the ins and outs of this process. Inspect every deal that happens, every term, and transaction. Learn what mortgage means, what lien does, and everything else.