Owning your own home can have a number of benefits, both financially in the way of tax credits, but also psychologically. While there are many benefits of home ownership, however, many times the advantages of homeownership far outweigh those of renting.
One of the biggest advantages of homeownership is that there are a number of tax benefits. It is possible to deduct interest payments, which for the first few years are pretty high, directly from your taxes, as well as money that is spent fixing and repairing the home. The tax benefits alone often make owning a home considerably less expensive than renting and currently new homeowners can also receive up to $8,000 or 10% of the homes cost, whichever is greater, as a tax credit.
Another big advantage of homeownership is that you are building equity as you pay off your loan. Assuming the home increases in value over the time you own it, you not only build up direct equity by paying off the loan, but also indirect equity. This equity can turn into a rather substantial profit when the home is sold. This is opposed to renting, where you get nothing from making your monthly payments.
Since you own the home, this also means you are free to do with it what you want. For example, you might decide to completely re-landscape the front lawn, tear down a wall, or repaint your home. These improvements often in turn increase the value of the home, which means you get a real return for investing time and money in your property. Of course the flip side to this is that if something breaks, you will have to take care of it yourself.
Many homeowners will buy a home that is in need of repair and live in it as they fix it up, this can result in a great increase in the value of the home and increase the equity the homeowner has in the home. This type of equity is often called sweat equity.
Owning your own home also gives you a lot more control in where you live. When renting, it is not uncommon for the landlord to sell the property, this might mean you can no longer live their. It is also possible that the landlord could overextend themselves, resulting in the foreclosure of their rental properties and meaning that you must move.
There are many advantages to owning your own home, but for some renting is the best choice. For example, if you do not have a steady income, do not plan on living their for more than two years, don’t have money for a down payment, or simply don’t feel like taking on the responsibility of fixing, repairing, and maintaining the property, renting might be a better option.