Renting Vs Buying – Financial Benefits of Real Estate

Video Transcript Below

Homeownership is often a significant part of what many consider the American Dream. While many younger generations choose not to buy a home, those who buy into the housing market see substantial financial benefits.

Hi, Tristan with the Denver Real Estate Agent.com and eXp Realty. No question becoming a homeowner is one of the most significant financial decisions anyone will make, and it does require some hard work to achieve. However, those willing to take on the task can see many financial benefits of homeownership. Here is a couple of the biggest:

Appreciation

 One of the most significant benefits of homeownership is appreciation. Appreciation is the growth in value of a home versus the original purchase price. So, if you bought a house for $300,000 and two years later it was worth $360,000 it appreciated sixty thousand dollars or twenty percent. And did you know that since 1963 home prices have steadily increased 3 to 4 percent per year, with the only decrease being the financial crisis in 2008? That shows homeownership is one of the best financial decisions many people can make.

Tax Savings

Another great benefit of homeownership is the possible tax savings many people can receive. When you own a home, you can deduct some of the expenses of owning that home from the taxes you pay to the government. These include both mortgage interest and property taxes, helping lower your overall taxable income for the year. 

Building Equity 

Finally, you have the benefit of building equity. Equity is the value of the home versus what you owe on the property. Going back to our previous example if you owe $300,000 on your home but it is worth $360,000 you have $60,000 in equity. Meaning you would profit from that difference if you decided to sell. Now you can build equity by paying down your loan and gaining appreciation in value, as we discussed earlier. This is a significant benefit over renting, where you’re paying monthly payments without any financial gain.

So there you have it, just a couple of the financial benefits of homeownership. If you are ready to start your journey towards homeownership reach out, I would be happy to help. Again I’m Tristan Colborg with The Denver Real Estate Agent.com and remember you deserve an elevated real estate experience.

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