Most people invest in real estate by becoming homeowners. Part of the American dream is that the equity, which is the difference between the market value of your home and the loan owed on it, increases over time to produce a significant part of your net worth.
Unless you have the good fortune to live in a rent-controlled apartment, owning a home should be less expensive than renting a comparable home throughout your adult life. Why? As a renter, your housing costs will follow the level of inflation, while as a homeowner, the bulk of your housing costs are not exposed to inflation if you have a fixed-rate mortgage.
Owning your home can add to your sense of financial security as the economy fluctuates. In addition to the financial benefits, home ownership gives you more control over your own living space; for example, it allows you more freedom to decorate your home’s exterior and interior according to your own tastes.
Uncle Sam gives homeowners another major financial boost by making your mortgage interest and property tax costs deductible. Although you don’t get any tax benefit if you have to sell your home at a loss, any profit made when you sell your primary residence is tax-free up to $250,000 ($500,000 for a married couple) as long as you lived there for at least two of the five years prior to the sale.
Unless you have the good fortune to live in a rent-controlled apartment, owning a home should be less expensive than renting a comparable home throughout your adult life. Why? As a renter, your housing costs will follow the level of inflation, while as a homeowner, the bulk of your housing costs are not exposed to inflation if you have a fixed-rate mortgage.
Owning your home can add to your sense of financial security as the economy fluctuates. In addition to the financial benefits, home ownership gives you more control over your own living space; for example, it allows you more freedom to decorate your home’s exterior and interior according to your own tastes.
Uncle Sam gives homeowners another major financial boost by making your mortgage interest and property tax costs deductible. Although you don’t get any tax benefit if you have to sell your home at a loss, any profit made when you sell your primary residence is tax-free up to $250,000 ($500,000 for a married couple) as long as you lived there for at least two of the five years prior to the sale.
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