The pandemic has made us realise the importance of Home-Ownership. If you are wanting to have a secure and easy existence you can never go wrong with buying a house for yourself. Let’s take a look at these 9 benefits of owning a home –
1. Long-Term Savings – Buying a home gives the opportunity to build wealth and create long-term savings. By building equity in your home, you are also setting aside money for your future. That’s because there are several ways to tap into your home’s equity down the road. Studies show that homeownership rates peak at or near retirement ages, suggesting that home equity contributes to retirement savings for many Canadians. Therefore, by buying a home, you are promoting financial stability.
2. You are paying your Mortgage instead of your Land Lord’s – Imputed rent refers to the idea that by owning a home, you are acting as your own landlord;Equity refers to the amount of value you have in a given asset. As you pay off your mortgage each month, you will be building equity in your home. This differs from paying rent because you will be contributing to a physical asset rather than making monthly payments to a landlord. This is why purchasing a home is often thought to be a financially savvy move.
3. It helps you build your Credit Score – Timely payments of installments help you build your credit score. At first, when you apply for a mortgage your credit score might take a hit but consistent payments later turn out to be a boon in uplifting your score keeping your debt-to-income ratio at a reasonable level.
4. Building Wealth – As your property increases in value, so does your equity, allowing you to sell for a profit. You could use that extra money to reinvest in a new home as well as an investment property. Additionally, you could use your home to build wealth right away by using it as a rental property or house hacking.
5. Social Participation means where you live is where you build – When compared to renters, homeowners will often remain in one area for longer periods of time, adding a certain degree of stability to the neighbourhood. Homeowners are also more likely to contribute to the maintenance of their properties and surrounding areas. This then translates to increased incentives to participate in local politics and community organizations, Volunteer activities potentially leading to an overall increase in civic participation.
6. Financial Stability – Owning a home often imparts a sense of permanence and stability to homeowners. In the long run, owning a home gives several benefits of deduction of taxes, building equity and wealth. It gives a freedom to plan finances and make the most of the investment opportunities.
7. Emotional Satisfaction backed up by Sense of Pride – A study shows that homeowners have higher self-rated health when compared to non-homeowners. This study also showed homeowners have higher perceived control over their lives and higher self-esteem and happiness rates than renters. When you own a home, the desire to maintain a stable environment can be an emotionally satisfying experience.
8. Tax Benefits – Depending on your jurisdiction, there are also property tax deductions to be aware of. Homeowners may be able to reduce their taxable income further by deducting property tax. Any interest paid on a home mortgage is tax-deductible. This means homeowners can reduce their taxable income by deducting the interest paid on a mortgage.
9. Property Improvements – One of the biggest benefits of homeownership is that it offers the freedom of customization. Homeowners can complete renovations to make the house exactly as they want, which could boost the property’s value in the process. Additionally, as a whole, owner-occupant housing is often better maintained than rental properties—creating yet another benefit of homeownership.
Which benefits of homeownership came as a surprise to you? Let us know in the comments below
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