Purchasing a piece of real estate is one of the largest investments that most people will make in a lifetime. With this large purchase comes a high level of responsibility, but the investment also comes with great benefits. Here are some of those benefits:
Owning a home holds many benefits. The most important benefit of owning a home is the equity that builds within the property. In most instances, people that purchase homes do so at a lower price than the value of the home when the owner decides to re-sell the property – this profit is often used to invest in another property.
Equity is defined as the amount of money that the home is worth, minus the amount of money outstanding on the home owed on a mortgage, or to a lender that financed the mortgage. Equity grows as the value of the home increases, and substantial amounts of the mortgage has been paid.
Homeowners can see merit when this occurs on a monthly basis. Equity grows quicker in homes that are in areas of increasing value – and is a valuable incentive to owning your own home. Once equity is grown within the home, the owner is able to obtain large amounts of credit, based on the equity within the home; these loans are referred to as home equity loans which homeowners use to finance renovations, family emergencies or other unexpected expenses.
Owning a home with positive equity enables the homeowner to gain credit to finance other large purchases or consolidate outstanding debt. This use of the home equity can be valuable for those suffering from high amounts of consumer debt.
Owning a home is beneficial, as many states offer tax incentives to those who own their home.
Home ownership allows the owner to feel a greater part of the community as they often have a vote in community matters, zoning and other municipal decisions.
One of the most important aspects of owning your own home, and investing in real estate include the pride that comes with the purchase. A home is one of the largest purchases that one will make in their lifetime.
Purchasing a home enables the owner to create a higher value with renovations, additions and other methods of increasing the value of the home. Experts state that to a certain extent, each dollar you put into the home will cause you to gain two when the home is resold.