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The Top 5 Benefits to Owning a Home

Posted by Shannon M. Schwab on October 3, 2022

Making the decision to purchase a home is probably one of the biggest financial decisions that people will make. Home ownership comes with many things – creative freedom, stability, community, and most importantly, all of the tax benefits that come along with owning a home.

When you’re making a huge decision like this – you should be asking yourself “why?”. Before making this purchase, you’ll need to consider how home ownership will affect both your finances and your everyday lifestyle. Luckily, I’ve already made your go-to ‘pros’ list here. 

Quick Takeaways

  • Get more money back at tax time
  • The demand for housing is increasing.
  • Gain equity over time with your mortgage payments.
  • Have total creative control and establish community.

1. Tax benefits. 

The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying and owning a home. 

This is why we frequently hear about people with great jobs, and no-write offs (like a home) almost always owing money at tax time. Those with homes and dependents often get more money back at tax time, whereas people without homes to write off end up having to pay more money back to the government.

2. Appreciation. 

Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing-home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®

The housing crisis back in 2008 caused some to question the long-term value of real estate, but even in the most recent 10 years, values are still up 7.0 percent on a cumulative basis. In addition, the number of U.S. households is expected to rise from 10 to 15 percent over the next decade, creating a continued high demand for housing. 

Think about it this way – people will always need four walls and a warm bed. The classic supply and demand for homes will continue to fuel the appreciation value and ultimately put more money back where it came from – in your pocket!

3. Equity. 

Money paid for rent is money that you’ll never see again, but mortgage payments allow you to build equity ownership interest in your home. Not only are there plenty of tax benefits to owning a home, but with a mortgage payment, you have control over what you want to do with your equity. In this case, your money is not tied up in retirement savings that you can’t access without penalty. 

Building equity in your home is essentially a ready-made savings plan that you control. And when you sell, you can take up to $250,000 ($500,000 for a married couple) as gain without owing any capital gains tax back to Uncle Sam.

The bottom line here? The money you spend on a rent payment each month isn’t gaining any value long-term. With a mortgage payment, your money is gaining value. This means that eventually, you can take that equity out and buy the beach house you have always wanted!

4. Predictability. 

Unlike rent, your fixed-rate mortgage payments don’t rise over the years. As a result, your housing costs may actually go down as you own the home longer. Put together the tax benefits of owning a home with making a higher salary due to yearly inflation and you have yourself a winning combination! 

Keep in mind here that property taxes and insurance costs will likely increase but only very slightly. With all this in mind, your fixed-rate mortgage payments and your job salary increasing with the standard 2-3 percent raise in the cost of living is the perfect roadmap to a cozy and comfortable future.

5. Freedom & Stability. 

The tax benefits to owning a home are great but you also get to have total creative freedom and control over what your home looks like. In contrast to renting and having to abide by the terms of your lease agreement and living under the eyes of a landlord, the home is yours. From paint color to countertops, you can decorate any way you want and therefore choose the types of upgrades and new amenities that appeal and work with your lifestyle. 

Build a gorgeous outdoor oasis with a pool, hardscaping, and that perfectly cozy firepit you’ve always wanted. Or, how about a full-sized basketball court, a driving range, or even batting cages? In any case, the world is your oyster when it’s your own property!

In addition to creative freedom, home ownership provides you with priceless stability. Remaining in one neighborhood for several years will allow you and your family the time and the opportunity to build long-lasting relationships within the neighborhood you live in and the surrounding community. 

This sense of community is more important than we give it credit for. I have seen firsthand how a strong sense of community in my own neighborhood has continued to drive the value up. So many people these days still long for the American Dream neighborhood with kids riding their bikes together, playing in the yard, and fun neighborhood events that bring everyone together.

If you’ve been thinking about purchasing a home, The Steve Laret Team is here to guide you through the process. We’ve got the answers to nearly any question that you could think of as it pertains to real estate and home ownership. Make the first move by scheduling a free consultation with one of our expert agents here.

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