Why is Homeownership Important?
By: John Garcia | Date Posted: March 7, 2023
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To many people around, homeownership is one of the greatest milestones they want to achieve in life. It not only represents an elite status but also celebrates your financial success and stability. Homeownership, though, seems like an overwhelming task, a lot of people would do anything to have this come true. Its importance has not been hidden from anyone. Additionally, its significance has increased especially in such times of economic instability and high inflation since owning a home is a way to protect and profit from your financial assets.
Homeownership has become extremely important, especially due to the countless advantages it holds.
Advantages of Homeownership
Having homeownership has numerous benefits and advantages; from financial to social benefits and even tax benefits.
One of the most important advantages of homeownership is its financial benefits. Investing a large sum of money to buy a home might seem like a major expense at first but it will help you increase your wealth, savings, and profits in the long run.
By paying your monthly mortgage, you will be able to build equity in your home. Hence, the value of your assets shall increase as well. This will help you have strong financial assets in the future, especially in times of need.
On the other hand, renting a home to live in does not help in building any equity since you would have to pay a monthly rent to your landlord and this money would not contribute to your financial assets.
Long-standing Financial Savings
As you build your equity, you will automatically be saving financially in the long term. This will allow you to put some money aside for the future. You can then use your home’s equity in times of need or once you retire. Therefore, having homeownership allows you to have financial stability.
Increase your Wealth
The value of real estate properties is always appreciating with time. As time passes by, your home’s equity shall also increase. This can then be sold for greater profits. You can then use the earned profits to re-invest in a new house or any other property that you wish, making additional profits from your previous ones.
Owning a home also means that everything inside of it is also yours. This includes the home systems like electricity, plumbing, heating, and air cooling systems as well as different appliances such as ovens, refrigerators, air conditioners, dishwashers, washing machines, etc. It is recommended to get a home warranty service to protect these assets of yours.
However, many people are unaware of this and the question remains, “What is a home warranty?” A simple warranty plan ensures these systems and appliances are working well and to their full potential. This plan covers any damages that may occur to these systems or even replacements where needed, hence, saving your money and increasing your home’s value as well as your wealth.
Owning a home also gives you control over your finances. By paying monthly mortgages, you know how much money to set aside every month for the payments. This helps you maintain your budget and keep track of your finances properly.
Strong Credit Scores
As you pay your mortgage on time, your credit scores build as well. This will help you make other financial investments, such as buying a new car or property, etc.
Homeownership also has several social benefits.
Increased Community Participation
As a homeowner, you are more prone to live in a particular neighborhood for a longer time. This brings stability not only to your life but also to your surrounding neighborhood. Homeowners tend to participate in local community activities more often than those who are living on rent since it’s their temporary abode. Hence, a major contribution towards the community comes from the people who own property there, thus, increasing community participation and bond.
People who live on their own property tend to stay happier and more relaxed. They do not have to worry about the increasing rent prices and can also manage their finances properly. They know that any money they spend on their homes shall benefit them in the long run. Hence, homeowners tend to stay healthier and happier than those who are living on rent.
Freedom of Living
People who live on rent lack the freedom to live in the house the way they want. Homeowners have the advantage to make any property improvements or renovations they want and like. You do not have to be answerable to any landlord or face any consequences in case of damage to the property. You are the sole owner of the place and have complete freedom to live how you want.
In such times of high inflation, getting tax benefits is a major sigh of relief that homeowners experience
Deduction on Mortgage Interest
The law permits homeowners to reduce their taxable income by subtracting any interest paid on a mortgage.
Tax Deduction on Property
Depending on where you live, there are laws for a tax deduction on the property you own. Hence, by being aware of the law, homeowners can further reduce their taxable income by deducting the tax on their property.
When you own a home, you act as your landlord. This gives you an advantage because landlords have to pay tax on the rental income they are earning, while this does not apply to homeowners. Since you are a homeowner living in your own house, you are exempted from paying taxes on rental income.
Owning your home is one of the greatest blessings you can imagine. Apart from several advantages and benefits it holds, you can live freely the way you want in your house and be mentally, physically, financially, and economically at peace of mind. Therefore, if you wish to have a stable and secure future, work on investing your earnings by getting homeownership.
Thank you for reading!