The perks of homeownership
Owning a home is a valuable, lifelong investment; even when the market is slow. A slowing housing market always affects a broad range of people, but if you are not looking to sell your home, it probably will only affect you slightly.
On the other hand, if you are looking to buy a home, your timing could not be better. Not only is there a surplus of homes on the market to choose from, but sellers are starting to get desperate and offering all kinds of incentives and discounts!
Although we are currently in the midst of a buyer’s market, some may still be reluctant to make such a big purchase and commitment. If you are thinking about buying a home in the near future, be sure to consider all sides of the coin but know it is one of the most valuable and rewarding experiences in life.
An article by Elizabeth Weintraub of about.com, “Before you buy a home – look at eight reasons to buy a home,” gives some valuable food for thought on making your first-time purchase.
The number one reason most people site as their motivation for buying a home is the pride of ownership. Although this may sound silly, being able to paint your walls green and maroon and hang the most godly permanent chandelier from your living room ceiling is undeniably rewarding.
Besides personal satisfaction, the monetary perks to owning a home are ten-fold. Not only do you gain equity from owning a home, but your mortgage interest rates are tax deductible. These are just two of the financial pluses to owning a home, there are countless others. Tax breaks are some of the biggest motivators for home ownership.
“Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. In California, the passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2% per year or the rate of inflation, whichever is less.”
“As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit--subject to limitation--free from taxation.”
One of the biggest bonuses to owning a home is the equity you acquire in your property over the years. Most people discourage renting and promote owning because you are essentially throwing away your rent money every month instead of investing it in to your home, thus building equity.
One great way to take advantage of this is to take out a home equity loan.
“Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.”
These are just a few of the best perks and advantages of owning a home, if you play your cards right, you could have your home making money for YOU before you know it.
Back to Articles
|
