Buying a home is a big investment with a lot of responsibility involved, but it also comes with many rewards. Here’s a breakdown of some of the benefits of homeownership that you can enjoy if you decide to take the plunge.
A Sound Investment
One main benefit that frequently comes up in lists of homebuyer tips is the investment aspect of homeownership. Staying in your home for a long time allows you to ride out short-term fluctuations in home prices and enjoy a long-term return on investment because a home’s value generally increases over time. Home values generally increase by 3 to 4 percent each year in a strong economy, so owning in a home is often viewed like putting money into an investment account.
Every time you pay your mortgage you gain a little bit more in home equity. Home equity is the value of your home that actually belongs to you—it’s what’s left over after you subtract the amount you owe on your home loan from the total value of your home. While your equity obviously increases with your mortgage payments, it also increases with the value of your home over time. This is important because you can borrow against your home equity to meet financial needs like home improvements, education, or medical expenses.
Homeownership also comes with some potentially significant tax deductions. You may be able to deduct your mortgage interest and property tax payments from your federal taxes (and your state taxes, depending on where you live.) These tax breaks can be especially helpful in offsetting the financial burden of the first few years of homeownership when most of your mortgage payments go towards paying off the interest on your mortgage rather than the principal.
While buying a home can obviously give you a sense of accomplishment, it also comes with other social benefits. One surprising benefit is that homeowners have higher self-rated health than non-homeowners, higher perceived control over their lives, and higher self-esteem and happiness compared to renters. It’s not just good for you personally though—it also benefits the community around you. Homeowners are more likely to stay in one area for a longer period of time than renters, which creates stability in the neighborhood. Areas with a high percentage of homeowners are more likely to have lower rates of property crime and are more likely to have voluntary crime prevention programs compared to areas that mostly have rental properties.
Creating the Home You Want
Another intangible benefit that you’ll enjoy as a homeowner is the amount of control you have over your space. Want pets? Get a furry friend or two. Dying to paint your home office lime green? Go right ahead. Can’t wait to replace an outdated refrigerator? Go for it. Owning a home allows you to make any changes or improvements to your home that you want without having to get the approval of a landlord first. You can also enjoy a home that is in better shape—houses owned by the occupants are generally better maintained than rental homes.