If you don’t own your home, and are in otherwise in good shape, you should strongly consider buying a home. There are number of benefits to owning your own place. First, you have a tremendous tax advantages as the mortgage interest and property tax payments can be written off your taxes. You also have greater autonomy in terms of decorating and remodeling. Owning real estate also provides important protection against inflation and housing can be an important asset when you reach retirement after the mortgage is paid off.
The reality is that the vast majority of wealthy Americans own their own home. The richer you are, the more likely you are to own your home. The latest survey from the Federal Reserve puts the median homeowners net worth at $234,000 and the median renters at $5,000. Home ownership is one of the basic principles for building wealth. Why? Well, it seems that home ownership has tax benefits, and forced savings mechanism via mortgage payoff have a substantial long term impact on your bottom line.
When buying together, it is very important that both partners have to buy in to the responsibility of ownership. Let’s face it, in addition to all of the perks of home ownership, it can also be a lot of work. Make sure that if you opt for getting a fixer, that you are both willing to put up with the hassle of it all. You should also have a frank conversation about what your plan would be for repairs or improvements, as you might very well look at things differently when it comes to what is seen as necessary, or how long you are willing to live in a construction zone. Even with a standard house it is good to discuss these things, as lawn mowing, gardening, and small fix-its can suddenly take up your weekends.
Home ownership increases your bottom line in several respects. First, its a key part of your net worth. Most studies of household wealth show that, as a general rule, homeowners are richer than renters. This is due to a couple of mechanisms; mortgage payoffs result in increased savings, asset prices for real estate increase over time and there are substantial tax breaks for owning your home. Second, home ownership increases social prestige. Third, home ownership is better for children and families. Click here for the proof.
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