You’ve probably heard the phrase, maybe even said it yourself, “Living the Dream.” For many people, the American Dream means owning a home. Purchasing a home is typically the single most substantial investment of someone’s life. Opening the door to your own home or the very first time is a significant accomplishment. It’s a big moment and something to be truly celebrated. There are many excellent benefits to owning a home, versus renting, and these are just a few.
When you make a rent payment, month after month, year after year, you are making the payment for someone else’s mortgage. You don’t have any ownership in the home. As soon as your tenancy is over, so is any interest you may have had in the property. Owning a home is entirely different. Homes generally increase in value, and that means you build equity. Over time your $400,000 home may become valued at $450,000, or even higher, which helps you create personal wealth.
When you rent a home or apartment your landlord can typically raise the rent on a regular basis. When you buy a house, assuming you get a fixed rate mortgage, the only thing that should increase is your property tax and insurance premium. Your monthly costs are therefore much more predictable.
In 2018 the U.S. introduced some significant changes to the tax laws, which included reductions in many common household deductions. Generally, property tax and mortgage interest can still be deducted, but it depends on your total household income and some other factors. We recommend talking with your tax professional for more details.
Pride in Homeownership
There’s nothing wrong with feeling proud of yourself for buying a home. It’s part of the American Dream and a huge accomplishment. Many people say they feel more confident after purchasing a home. It can also make you feel more secure, like you have more control over your finances.
Ties to the Community
When you buy a home you are putting down roots in a specific area. It won’t take long to get to know your neighbors and make new friends, and as you do, you’ll become more in tune with events in the community. If you have children, they will probably attend school close by, which naturally tightens the bond even more.
Privacy and Freedom
Perhaps one of the best things about owning a home is that you are free to do just about anything you want in your house. Sure, there might be a Home Owner’s Association (HOA) that has rules and regulations about what you can do outside, but the inside is all yours. You can paint your walls purple, red, or any color you want. It’s your domain, and no one else can tell you what to do in your space.
Home ownership is extremely rewarding, not only financially, but emotionally as well. It’s no wonder that millions of people buy new homes each year and fulfil their American Dream.
Note: Opinions expressed are solely my own and do not express the views of my employer.