Acquiring a home is a dream of every individual, which comes with investing a significant portion of their money. People usually feel obliged to buy a house because they want to have their personal space, raise their children and have their backyard, make home their office or a business place like Covid-19, decorate and design their house or hang a photo on the wall they want. This article will review the benefits of homeownership to help you determine whether to buy a home.
If you consider buying a house in major cities, the excruciating cost averages a million dollars. Also, due to the bubble in the real estate industry, even suburban homes are not cheap to buy. But there is enormous pressure on people to purchase their dream house. But more often, people forget to contemplate the benefits and risks of this decision financially and emotionally. However, some will continually deliberate over the financial side of buying and maintaining a property because simply getting to the point of buying a house requires a certain degree of economic and mental prosperity. Paradoxically, it is undeniable that the financial benefits of homeownership outweigh the initial investment; however, it does not interpret that the person is content with the decision. So, what is the other reason people buy houses even after unstable finances? The psychological answer is that a human feels emotionally obliged to purchase at least one place they can call their home. They feel a sense of security for themselves and their families. Consequently, it impacts their decision to buy or rent and it is prevalent to understand the merits of homeownership.
THE EMOTIONAL BENEFITS OF HOMEOWNERSHIP
Some people like being a homeowner rather than being a tenant. The psychological side of possessing a house excites them more and is a part of community culture. Even some reports have mentioned that people who own a house are more stable than those who lease as renters may have to move from home to home. In addition, staying at your dwelling for years reduces the stress. Unlike homeowners’ people who rent a property have to find a new home if the proprietor takes back their house for some reason or other or you have to move to a new place or a better place.
It brings pride of homeownership and belongingness with community.
Renting a house means paying off your landlord’s mortgage, so why not own a home and pay off your mortgages says** Pawan, a Realtor at Real Estate Hut**. According to James A. Graaskamp, Center for Real Estate director at the University of Wisconsin-Madison, homeownership builds wealth for generations. In India, most people live in joint families, and the house they live in is built or purchased by their ancestors. They feel inherently belonged and emotionally attached to that house. It is an emotional satisfaction. The National Association of REALTORS® (NAR) survey found that homeownership improves people's health, boosts children's performance, induces social life, and reduces crime rates. Although some of the data suggest that renting is better than buying a house, buying a home is a financial investment and an emotional investment. Therefore, before buying a house, one must also look at the psychological factors of homeownership if financial benefits do not sway. However, one must not ignore the economic advantages of homeownership.
THE FINANCIAL BENEFITS OF HOMEOWNERSHIP
Long-term investment- According to a poll, real estate investment is one of the top long-term investment options in the world. It is easy to invest in property because it doesn't require special skills, unlike stocks. The land prices keep on inflating because the population is growing, and the availability of land is limited. If your house is near all amenities, its price will boost in just a year. Also, in a strong economy, the value of a home increases by 3% to 4% every year due to inflation.
Building equity- Paying your mortgage is better than paying rent because, after every installment, you get one step close to owning a house compared to paying rent. As you save more money paying off your debts, the value of your house also rises. Therefore, you accumulate equity in two ways- Equity builds as the house's value leaps up or when you pay off more debts. That is the reason people refer to mortgage payments as "forced savings."
Tax deductions- When you own a house, you get notable tax deductions on mortgage interest and property tax. You can also claim the expenses of owning a house. For the first year, you would only be paying off the mortgage interest. The owner receives deductions up to $10,000 and 15% of the renovation costs under home accessible tax credit (HATC). Also, you can gather considerable savings when you write off mortgage points on your loan, which mainly depends on how many points you acquire. You are also eligible to recover GST/HST paid for renovation or construction of the primary residence.
Next step- Buying a house is an emotional and financial decision. And for some, it is more of an emotional decision. Guglu is there to help you land your dream house under the digits of your choice. Take the first step by visiting GUGLU
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