As a renter, you’ve likely heard that owning a home has a variety of benefits. Whether you’re happy renting or thinking about buying, it’s helpful to know the benefits of homeownership and why it’s so appealing.
In this Redfin article, we’ll highlight eight benefits of owning a home and tips to make homeownership worth it. Whether you’re looking for a home in Portland, OR, or considering buying a condo in San Jose, CA, find out the benefits of homeownership to decide if buying a home is right for you.
8 benefits of owning a home
1. Building home equity
2. Home value appreciation
3. Tax benefits
4. Predictable monthly payments
5. Freedom to design your space
6. Long-term stability
7. Access to home equity funds
8. Help improve your credit score
1. Building home equity
Home equity is the portion of your home that you own, calculated as your home’s market value minus what you owe on your mortgage. It grows over time as you make mortgage payments and if your home appreciates in value.
For this reason, many people plan to live in their house for a few years in order to build equity and possibly sell for a profit. Some of the benefits of building home equity include:
- Using the proceeds from your home sale as a down payment on your next home.
- Ability to to afford a larger or more expensive home.
- Paying off your home means you can live mortgage-free.
- Using your equity to borrow money for home improvements or other big expenses.
There are many ways to access your home equity, which we’ll cover in more detail later.
2. Your home’s value may appreciate over time
Homes typically go up in value (appreciate) over time, making it one of the more reliable investments. For example, you buy a home for $400,000 and it increases in value by 2% each year. After five years, your home’s value may increase to $440,000. When the time comes to sell your house, you may make a profit on the sale.
There are plenty of…