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Benefits of Owning Your Own Home
The Best Investment
As a fairly general
rule, homes appreciate about five percent a year. Some years will be
more, some less. The figure will vary from neighborhood to neighborhood,
and region to region.
Five percent may not
seem like that much at first. Stocks (at times) appreciate much more, and
you could earn over six percent with the safest investment of all,
treasury bonds.
But
take a second look…
Presumably, if you
bought a $200,000 house, you did not pay cash for the home. You got a
mortgage, too. Suppose you put as much as twenty percent down – that
would be an investment of $40,000.
At an appreciation
rate of 5% annually, a $200,000 home would increase in value $10,000
during the first year. That means you earned $10,000 with an investment
of $40,000. Your annual "return on investment" would be a
whopping twenty-five percent.
Of course, you are
making mortgage payments and paying property taxes, along with a couple
of other costs. However, since the interest on your mortgage and your
property taxes are both tax deductible, the government is essentially
subsidizing your home purchase.
Your rate of return
when buying a home is higher than most any other investment you could
make.
If you are moving to
a home for the first time, you are going to be very pleased with all the
new space you have available. You may have to even buy more
"stuff."
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