Did you know there are more reasons to buy a home than just to call a place your own? Of course, that’s one of the largest reasons – who wouldn’t want to own their own home? But there are many other reasons you may want to consider it, whether you currently rent or are thinking of buying another property.
- A House is a Forced Savings Plan
Your house is your largest investment. Even if you use FHA financing and only put down 3.5 percent, you still make regular mortgage payments. With each payment, you knock down your loan’s principal and gain equity in the home. The equity is your profit or the difference between the home’s value and your outstanding loan. The longer you pay on the mortgage (or the more you pay), the faster you build your own savings plan. Should you need to tap into the equity, you can always refinance or take out a home equity loan.
- You may Save Money on your Taxes
Tax laws change each year, but there’s always some type of savings for homeowners. Whether you can write off your mortgage interest and real estate taxes (like it is right now) or you can write off other expenses, such as utilities, insurance, and depreciation on an investment home, you lower your tax liability and have a great investment.
- Your Home can be your Retirement Plan
While I don’t recommend solely using your home as your retirement plan, it can play a role. It’s not a bad idea to have retirement income come from various sources. We all know by now that we shouldn’t rely on Social Security alone and your 401K or IRA may or may not do as well as you think.
Having the backup investment of your home equity can be your safety net. If you downsize, you can use the leftover funds for your retirement so you can enjoy your golden years rather than worry about your finances.
- Real Estate Investments are a Great Way to Diversify
Diversifying your portfolio is the key to a profitable future. If you’re tired of risking your money in the market, consider buying and investing in real estate. Whether you buy a fix ad flip, selling the property a few months after buying it and renovating it or you buy and hold, renting it out for a profit, you earn a steady cash flow and can verify your portfolio in ways you otherwise wouldn’t be able to.
If you’re on the fence about buying a house, think of the benefits. Where else could you get such a great return on your investment and set yourself up for the future? Like any investment, there’s risk involved, but it’s often a lower risk than investing in the market and you certainly earn more than you’d earn just sticking your money in a savings account. Make the most of your hard-earned money and buy a house while rates are low!