A home is where you feel warm and cozy. It’s where you go to retreat from the world, spend time alone or with family and friends. It’s, therefore, unsurprising that homeownership is every American’s dream.
However, working closely with property managers for years, Upkeep Media marketing agency warns that homeownership is not all unicorns and rainbows. Sometimes, it can feel nothing but a leech on your finances. Pipes burst, termites eat your structure, wiring fails, foundations crack – the list is never-ending.
Maintaining a home requires a lot of money; there is no question about that. However, if homeownership was nothing but a money-sucking black-hole of finances, no one would own one. It just wouldn’t make any sense.
Homeownership does indeed have a myriad of financial benefits. Whether the benefits dwarf the accompanying expenses is something that only the individual homeowner can decide.
In today’s blog, you are going to learn about the seven financial benefits of owning a home can bring you.
Benefit #1: You can make energy-efficient choices
Aging and inefficient appliances can quickly rack up your monthly utility bills. This is especially true for older dishwashers, washing machines, water heaters, and toilets. These use way much water than is needed and can take a significant toll on your utility bills.
For a renter, the only choice they have is to make a request to their landlord. If the landlord agrees to pay for the upgrades, then great. However, if not, then the renter must decide to either continue paying the huge utility bills or move out.
When you are a homeowner, however, the buck stops with you. You get to decide what kind of appliances to use. You won’t be at the mercy of somebody to make cost-saving choices.
Benefit #2. Owning a home acts as an investment
Every mortgage payment is principal paydown. With every payment, you own just a bit more of your home. Renters, on the other hand, will not expect to see any return on rents paid.
That said, it’s important to make the right choices when it comes to purchasing your home. This will help ensure that your home becomes an investment and not a money drain.
Benefit #3. Fixed mortgage payments can help stabilize your budget
Financial stability helps to achieve better control in life especially in the future. This is something not afforded to all renters. This is because renters can face unexpected increases in housing costs.
Homeowners, on the other hand, can enjoy financial stability offered by fixed-rate mortgages. This can help you stabilize your budget knowing that you won’t be facing increases in your housing costs.
Benefit #4. Owning a home can boost your credit-worthiness
Provided that you make every mortgage payment on time, your credit score will gradually increase. In other words, your payment history is the single most important factor influencing your credit rating.
As it improves, you could even consider refinancing your home. This could help you lower your mortgage payments or even shorten your loan terms.
Benefit #5: Homeownership can become a source of passive income
As a homeowner, you may be able to turn your home into a cash cow. The following are some ideas. You could:
- Let people store their items in your home. You can earn as much as $1.44 per square feet doing this.
- Sell parking spaces. According to CurbFlip, you can earn as much as $375 renting out an empty reserved parking lot.
- List your home on Airbnb. With a rental listing site like Airbnb, you can make a decent extra income renting spare rooms.
- Rent out your lot to tiny house dwellers. More and more people are looking to downsize their lifestyles. Many counties, however, forbid tiny houses unless they share a lot with a traditional house. If you have extra space, you can make some money renting it out.
Benefit #6: You can enjoy tax breaks
There are many great tax benefits tied with homeownership. And, you’ll enjoy them from the time you buy your home to when you decide to sell. Up to $100,000 of interest incurred, for example, on home improvement loans are tax-deductible.
Home improvement changes centered on energy efficiencies, like storm doors and new windows, can also give you a decent tax credit.
State and local taxes, including property taxes, can also be deducted up to $10,000. This is per the Republican tax bill that was signed into law by President Trump on December 2017.
Benefit #7: Owning a home can help lower your insurance premiums
You may enjoy discounted car insurance premiums by virtue of being a homeowner. Insurance companies give homeowners lower rates because they exude stability. While this isn’t a reason to own a home, it’s certainly a good financial perk to have.
There you have it. 7 financial benefits of homeownership. Remember, though, while owning a home can be a great investment, there is a lot more responsibility in terms of upkeep.