5 reasons why homeownership investment is the best financial investment, by Walter Huff.

5 reasons why homeownership investment is the best financial investment

By Walter Huff

Ahome is the safest investment that one could ever own. First, what makes a house a good investment is the fact that over time, it will appreciate in value and secondly, at old age, you can choose to sell the home for a better and a smaller home like a condo. Buying your own home is the best option that you could ever make after all, it only makes more sense to buy a house than to rent since there are no real returns that you get renting.

BUYING A HOME AS YOUR INVESTMENT

What makes a home one of the best investment is its nature, it is inflation free or inflation protected and it is a physical asset that does not disappear like so many other assets like stocks. A common problem that affects most of the people is that they will usually wait until they buy their second or third home to make an investment on them. You can start as earlier as the first time you purchase your home. Many people have found themselves trapped in the mortgage crisis and that is the time when they start asking themselves if the home could really become a good investment idea. Buying a home is one of the long-term wealth accumulation idea as it will act as a forced savings account. And the advantage keeps flowing bit by bit because instead of paying the landlord, you could be paying yourself through paying down a mortgage on a house.

WHY HOMEOWNERSHIP INVESTMENT IS THE BEST IDEA

Financial analysts and realtors explain that homeownership is the best idea since the mortgage payments can be fixed while the rents go up and the equity in your home can be a financial resource in the future days to come.

Basically, here are some of the reasons that make homeownership one of the best investment in the real estate market today;

1. YOU WILL BECOME A SMART SPENDER

In the rentals, you will have to make rent payments at the end of every month. These payments go straight into the pocket of the landlord and come next month, you will have nothing to show for it. However, having a home, you are assured of the mortgage payments which are an investment in the future. The reducing balance on a mortgage gets reduced and the home equity proportionally is increased, increasing your own retirement account. On the long run, it is better to spend your money on something that will pay off rather than spending it on something that is so unnecessary and that will not pay off or have any value in the future.

2. YOU WILL ENJOY LOADS OF TAX

BREAKS

With the homeownership as your investment, mortgage interest becomes deductible from your income tax. The overall effect is that this will lower your tax burden. Another advantage is that most of the homeowners do not have to pay capital gains tax. This normally will happen when the value of the home increases in value with not less than $250,000 and when it has been occupied as a primary residence for not less than two years.

3. RESALE VALUE

In city states, this could become one of the best investment because most of these areas attract professionals looking for permanent structures. Also, investing your homes in regions where the market is trending increases the net worth of the home. Therefore, when you get to resell the home, you will do it at a higher price actually much higher than the cost incurred when buying the home.

4. BUYING A HOME GIVES YOU THE

ADVANTAGE OF LOW INTEREST RATES

In evaluation of the interest rates by most of the financial institutions, borrowing to buy a home is seen safer than the credit cards or other loans.

With a bad financial decision and investment, it becomes very hard to qualify for a mortgage debt but with the home as your primary investment, this becomes very sound decision to most of the financial institutions and therefore, the interest rates rock at the bottom.

5. HOMEOWNERSHIP INVESTMENT

SUPPLEMENTS YOUR RETIREMENT

INCOME

Even as you contemplate about homeownership, you should also think about your future. Homeownership has the benefit of acting as your funds storehouse for your retirement funds. The homes are very likely to be paid off by the retirement and thus allowing them to be streamlined into the home equity to fund retirement benefits.

There are so many advantages that one will get as a home owner, however, even as you plan to buy a home, research into the market is very vital and very important. And as Chris Copley warns, buying a home is for the people who can afford it and those who plans to stay in one location for a while.

Investing in a home sometimes cannot always the be the best option like so many real estate agents make us to believe. A few years back, America was hit by the worst home bust where the value of the investment went significantly very down rendering the investment a waste, if not a total waste. However, that should not scare you because over the years, we have seen a home becoming and gain value slowly by slowly, thus making its return very significant. In this article, you will get all the relevant information that you will use to evaluate whether a home is the best investment or not.