Owning your own home is within your reach.
Buying a home may be the American dream, but it’s also a lot of work.
You have to make sure your credit is in order, apply for a mortgage, scrape together a down payment, spend time house hunting and signing a pile of paperwork, and then pack up and unpack all of your worldly possessions. Yikes!
So then why do millions of Americans go through the trouble of buying a home? Because they know that whatever headaches and hassles they must endure are far outweighed by the many benefits of buying a home.
If you need some inspiration to start house hunting or just want to make sure you’re taking advantage of all the benefits of home ownership, check out this top-10 list of perks that will repay your hard work from now well into retirement.
1. Predictable monthly housing payments
A landlord can raise your rent whenever a lease expires—and often by as much as s/he pleases. (There is no rent control in Utah!) But as a homeowner, your mortgage payment is locked in for as long as 30 years. For as long as you stay in the home, you know what you’ll be paying in a year, 5 years, and even 30 years from now.
Bonus: Your housing budget goes toward your homeownership, not your landlord’s pocket.
A house is a valuable asset (not just a headache!) By purchasing a home, you’ll have an asset that, in many cases, will appreciate in value over time. A $200,000 home today should see an increase in value to $250,000, $300,000, or more—depending on how long you plan to live there and Utah market conditions. This makes your home one of the best investments you can make and a way to establish a financial foundation for your future or your future generations (aka your kids).
3. Tax benefits
The many expenses of owning a home—like property taxes and accounting costs—are tax-deductible. The largest deduction is generally the interest you pay on your mortgage, but also includes things like energy efficiency and property taxes. This allows you to keep more of your hard-earned money.
4. Freedom to make modifications
What renter hasn’t thought “I’d really love to paint/alter/knock down this wall to…”? Well, to do whatever the hell you want to do. But, of course, you can’t—not without the landlord’s blessing. And if you are allowed to renovate your rental, it will most likely be on your dollar and for your landlord’s benefit.
Homeowners, on the other hand, don’t need permission. They can paint any room any color, replace the cabinets, add a deck, change out that dated chandelier, or anything they wish. And often times, a little renovation dollars go a long way for the overall value of the home, meaning you’ll get it back and then some!
5. It’s cheaper to own your own home
Sure, there’s the upfront cost of the down payment and closing. You’ll get this back at the other end when you sell the home. After that, in the Utah market the average rent is higher than the average mortgage payment.
According to recent statistics, the average apartment rent within the city of Salt Lake is $1,181. Average two-bedroom rent is $1,248. Compare that to the average mortgage payment of $993. (Average home price is $269,900, 30-year fixed with 20% down.) And that’s not all. The average apartment rent over the prior 6 months in Salt Lake City has increased by $51 (4.5%), while mortgage payments have stayed steady due to stagnant interest rates. Nationally, over the past 5 years, a typical rent rose 15% while the income of renters grew by only 11%, according to a report by the National Association of Realtors®.
6. Increased privacy
Some rentals are constructed of inferior building materials like plywood or shoddy drywall. Unfortunately, this seems to be the trend with newer construction. If your house, townhouse, or condo is built of concrete and stucco, it will provide a greater sound barrier from your neighbors.
You can also make your own modifications to something you own such as fencing to increase privacy.
7. Built-in rainy day fund
Home ownership provides you with the opportunity to borrow money on the equity you eventually build up by consistently paying your mortgage. Securing a home equity loan at a relatively low interest rate will free up your equity for an emergency, large project, or other expense.
8. Community ties
Owning a house you plan to stay in for a while also allows you to have an impact on your community with your taxes benefiting local infrastructure, schools, and organizations. You’ll also have a voice—if you wish—in how things are run in your area.
9. A secure retirement
A home can be the ultimate nest egg, providing you with a great investment for retirement. The longer you own a house, the less you owe on it and the more it should eventually be worth.
If you live there for 30 years, it may have appreciated 100%, and you’ll have paid off your loan meaning the entire value of the home is part of your net worth.
As you get older, you can sell the home and use the proceeds to purchase or rent something smaller. Another option: Rent out the house to maintain a steady income stream so you can travel or use for other recreational activities.
10. It’s yours!
This may seem fairly obvious, but it’s worth emphasizing: With a rental, you run the risk of getting kicked out at the end of your lease. With a home, you can live there indefinitely. And isn’t there something comforting in knowing there’s a place where you’ll always have a roof over your head?