As a result, many young Americans are wondering, “Should I rent or buy a home?” However, despite this, owning a home still has many financial benefits and is very beneficial in the long run. So what exactly do you stand to gain from owning your own home, and why is it so important that you save up to reach this goal? Here are the top financial benefits of owning your own home.
~When you are buying a home, you are making a long-term investment that will eventually pay off. Over time, the value of your property is likely going to rise. As populations increase and more people look to buy land, the demand for land will continue to rise. However, you can’t just create land and property, so there will always be a fixed supply of land. Since supply can’t rise in order to meet the increase in demand, the price of land will have to rise instead. As a result, as long as you hold onto your house and land long enough and don’t fall behind on payments, you could actually stand to gain a lot. In fact, buying a home and the land surrounding it is one of the best long-term investments you can make.
Cheaper Over Time
Another great thing about buying your own compared to renting is it is actually cheaper in the long run. If you pay a thousand dollars a month to rent an apartment, over twenty years, you will be paying $240,000 in rent. $240,000 can buy a house that you actually own instead. Yes, you’ll need to factor in the several thousand extra you’ll need to pay in interest on your mortgage, but there is still a major factor that makes owning your own home cheaper. At the end of those twenty years, you can turn around and sell your home for a similar price to what you paid for. When you subtract the potential money you can earn from selling your home, the costs shrink dramatically. However, when you rent a location, you’ll have nothing to show for it after twenty years, as the money is just simply gone, and you’ll have no way to recuperate it. As a result, if you plan on living in one location for a few decades, then owning your own home will almost always be a better value in the long run.
Control Over Utilities
One of the most overlooked financial benefits of owning your own home is control over your utilities. When you rent a location, your landlord may dictate what utility companies you can buy from. In addition, you likely will have little control over the appliances in the place you’re renting, meaning that you could be stuck with energy guzzlers that drive your appliance bills way up. On the other hand, when you own your own home, you have complete control over your utilities and the appliances that use them. As a result, owning your own home could mean that you end up saving lots of money on your utilities in the long run.
With owning your own home comes an increased likelihood of tax breaks that can save you lots of money. For example, if you take out a mortgage to buy your home, you can deduct the interest from your income taxes. In addition, property taxes may be deductible from your income taxes as well. Although the list price of buying a home may scare you at first, there are actually lots of areas where owning your home can save you money. These tax breaks and benefits can ease the financial burden of owning your home and can allow you to see your long-term investment come to fruition.