The Census Bureau revealed that the rate of homeownership rose to 67.9% in 2020, the highest since the third quarter of 2008, according to data on HousingWire. For many people, homeownership is life’s biggest achievement, and you’ve probably been dreaming of buying a home since you were young. It’s likely that you have been holding off investing in stocks or splurging on vacations to save for your dream home.
You may also have started researching tirelessly to learn more about off-market real estate and home listings. Property ownership is worth all the sacrifice, and below are the top three reasons why you should pursue your dream of owning a home.
1. Homeownership allows you to build wealth
Buying a home is one of the best financial decisions you will ever make in your lifetime. Unlike renting, property ownership allows you to build equity rather than put money in someone else’s pocket. Remember, equity is the value of your property, and it grows when your home’s market value increases.
Typically, home equity increases when you make an extra payment on your mortgage. Let’s say you’re paying $1,000 or $1,500 towards your principal every month. Over time, you’ll enjoy living mortgage-free or become a full-fledged property owner. This means you get value for your investment in the future.
2. Property value increases over time
One of the best ways to determine if homeownership is worthwhile is by estimating the return on investment you’ll get after ten or twenty years. Of course, calculating the ROI of owning a home can be difficult because the future is unpredictable.
However, understanding the factors that affect property value can help you estimate your return on investment within a particular period. Infrastructure development in your location, available amenities, job market, and population growth are key aspects that influence home price appreciation.
Demand and supply in the housing market is another factor that drives the value of a home upwards. Ideally, when the supply of homes is lower than the demand, you can be sure that your home’s value will increase significantly. You can also boost your property’s value by investing in home improvement projects like remodeling the kitchen, bathroom, exteriors, and living room or adding things like conservatories or bi-fold door blinds.
3. Tax benefits
In addition to pride of ownership, having your own house guarantees numerous tax benefits. As a homeowner, you’re eligible for tax breaks offered by the IRS. These tax breaks or deductions can help you offset a considerable amount of the cost of purchasing and owning a home.
The most common tax deductions for property owners are real estate taxes, mortgage interests, private mortgage insurance, and points. There’s also a likelihood you won’t pay tax for any profit you make when you sell a home.
Buying a home is a major investment that requires one to save a considerable amount of money. It might also take some time before you can become a property owner. However, property ownership is a dream worth chasing, as it gives you a sense of pride. You also get a chance to build wealth, enjoy a high return on investment and have access to numerous tax benefits.
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