What Are The Advantages Of Homeownership?
Owning your own home can offer you many advantages. Surprisingly, homeownership can also come with its own set of disadvantages as well. In this post we’ll go over both the advantages and the disadvantages of homeownership. Suprise, suprise…the pros far outweigh the cons.
Advantages Of Homeownership
1. An Easier Way of Living
The homes that we buy are designed to present us with conveniences that help fulfill our basic needs of living and comfort. Owning your own home gives you the opportunity to make the space your very own. Personalizing it to meet your specific needs much easier than if you were renting someone else’s house.
Buying your own home gives you the freedom to choose the exact location you want to live in. A location that provides you with an easier way of living. These kinds of things might be schools, work, and other things you frequently participate in.
2. A Good Financial Investment
Between 2000 and 2005, on average, home values in the United States have increased by about 36%. That’s close to 3x the rate of inflation during the same time period.
In some areas of the US, home values increased closer to 120%! As of today, it is not uncommon to see home values increase 10% to 15% in one year!
Buying your own home is often times a great financial investment. Imagine for a moment, turning a small amount of money in the form of a down payment, and immediately seeing very high rates of return, often in the double digits!
3. Tax Advantages of Homeownership
Did you know that for the first several years after buying your own home, nearly the all of the money paid in the mortgage goes towards interest? The good news is, that nearly all of that money you pay towards interest can be deducted on your federal taxes! That is a significant tax deduction! Homeownership plays a major role in many peoples tax strategy. Of course, you should talk to a tax professional before committing to anything.
Disadvantages Of Homeownership
1. Cannot Take Your House With You
One of the biggest disadvanteges of owning your own home is simply not being able to take it with you when you leave. You can spend many years working on and fixing your home to get it exactly how you like it. But when it comes time to leaving for another location, the options for taking it with you are very slim…and very, very expensive.
2. Value Subject To Neighboring Homes
Another disadvantage to owning your own home is that your house’s value is directly in proportion to what’s going on in your neighborhood. For example, if the home values in your neighborhood are falling, the value of your home will fall with them. This takes us back to disadvantage number 1, because when home values do fall, you will be unable to pick up your house and move it to a better location. At least not very easily.
There are advantages to homeownership, and there are disadvantages to homeownership. In my opinion, the advantages of owning your own home far outweigh the disadvantages. I have owned a number of homes and I have been a renter many times over. I have never, ever regretted the decision to buy.