Why Owning A Home is A Financial Power Move: 4 Reasons

Being a homeowner comes with benefits that are inaccessible to renters. Here are the top 4 reasons why owning a home is so financially powerful.

There is one over-arching question when it comes to deciding where to live: rent or buy? For many people, it makes sense to rent due to financial, employment, or lifestyle reasons. Buying a home is seen as more of a long-term solution for people who want to put down roots in a beloved city, and maybe start or grow a family. 

Your monthly payments will end

When you pay rent, your money helps keep you in the home or apartment, but your money goes to the property manager/landlord. Your money doesn't do anything else for you. When you own a home, every monthly payment buys that much more equity in the home. The longer you live in a home, the more equity and wealth you build. Eventually, you will own the home outright, which translates to you keeping thousands of dollars in your pocket every month. The end of monthly payments makes it very easy to travel, invest, or even upgrade to a bigger or better house.

Housing costs are predictable

When you own a home, you are better able to predict how much you will pay every month for your mortgage. If you have a fixed-rate mortgage, your payments will stay the same for 15 or 30 years, and will only go down if you refinance. As a bonus, you can always pay a little extra to reduce the time it takes to pay down your mortgage. 

As a renter, your rent will likely go up every year, but you can’t really predict by how much. Even if you score a great deal in an area that becomes hotter and more competitive as home values rise, eventually, rates will rise to more than you can afford or are comfortable paying. In addition, overpaying your rent doesn’t really benefit you in the long or short run.

Owning a home is a great tax break

This is probably one of the biggest advantages of homeownership. As a homeowner, you are able to claim multiple deductions and even write off certain expenses. For example, property taxes are tax-deductible. Also, you can write off your mortgage interest as a tax deduction every year. There are also homeowners exemptions that you should file as soon as possible when you buy a new house. None of these are accessible to renters.

Ride the rising tide

Across nearly the entirety of the country, home values rise every year. That means that the longer you live in a home, the more its value goes up, which equates to free equity. Super competitive markets in the West have seen home values rise the most, which has translated into tons of free equity for residents. Idaho and Montana lead the charge in rising home values with increases of 25% and 18.8% year-over-year, respectively. The Boise metro area has seen price increases of 32.8%. Many homeowners have seen their homes double in value compared to what they paid for less than 10 years ago. Doubling your investment’s value is not an option for renters.

If you are ready to break the rent cycle and buy a house, give the real estate agents at Build Idaho a call to get started.