Many of the advantages of homeownership are financial.
Multiple Listing Service of Hilton Head Island (HHIMLS), a premier multiple listing service in South Carolina and a member of the Council of Multiple Listing Services whose listing platform facilitates more than $3 billion in annual real estate transactions, has the tools to help you invest in property.
Here’s HHIMLS’ advice for people thinking about the advantages of homeownership:
1. Build Wealth Over Time
Homes typically increase in value, build equity, and provide a nest egg for the future. A recent article on CNBC says homeowners saw their equity increase 12 percent over the past year. That‚Äôs an average of $15,000 per homeowner.
2. Tax Deduction
The mortgage interest and property tax are both tax deductible.
3. Capital Gains Exclusion
If you buy a home to live in as your primary residence for more than two years, you qualify for the capital gains exclusion. When you sell, you can keep profits up to $250,000 if you‚Äôre single and $500,000 if you‚Äôre married and not pay any capital gains tax.
4. Cheaper Than Renting
Over time, the interest you pay will be lower than the rent you would be paying. Renting has no ROI. You‚Äôre putting money into your future, not throwing it away on a landlord.
5. Stable Payments
With a mortgage, you know what your payment will be over the length of the loan. Rent typically goes up as time goes by.
6. Improved Credit Score
Homeownership can actually improve your credit score. Making your monthly mortgage payments on time creates a reliable payment history with which to prove your credit-worthiness.
There are other benefits as well. There‚Äôs pride in homeownership and it ties you to the community. You create lasting relationships with neighbors, schools, and local businesses. And perhaps most important, it‚Äôs a place to build memories as your family grows, a place where your children will remember growing up and doing things together.
According to the National Association of Realtors, homeownership also provides increased education for children, lower teenage pregnancy rate, and a higher lifetime annual income for children.
Owning a home was once something all Americans aspired to. After the recession of 2008, many buyers became skeptical of the market. But protections have been put in place and lenders are much more cautious so they‚Äôre more likely to be sure you can afford a home before they issue you a loan.
The stronger labor market has led to rising incomes and a growing economy, resulting in the boosted demand for homeownership. Single-family home building increased almost three percent to a rate of 902,000 units in February.
Owning a home does mean upkeep. But it‚Äôs yours and you can decorate and landscape to your liking. It‚Äôs something you can pass on to your kids or sell and go traveling as you get older. It‚Äôs both a financial and an emotional investment. That‚Äôs why you want to be sure to find the right one.
Multiple Listing Service of Hilton Head Island members have access to all the tools you need to make the right decision. Our database is the most comprehensive in the area, including properties inland and into Georgia. It lists all you need to know about each home‚Äôs neighborhood and even includes green features of each home. Our members receive regular training on all the latest technology to help make your decision as easy as possible. You can find an agent at hiltonheadmls.com.
Image: Kelly Alpert