Happy Homeownership Month

Here are a few benefits to owning your own home:

1. 🏡 Property Value Growth (Appreciation)

Home values in many parts of NC tend to increase over time, helping you build long-term wealth as your property becomes more valuable. That appreciation leads to income mobility and generational wealth. There is a direct link to homeownership and people being able to move from low to mid to high income neighborhoods and jobs. Talk to me if you want more information on how to use your equity!

2. 💰 Tax Advantages

Homeowners may be able to deduct mortgage interest and property taxes, which can lower your overall tax burden compared to renting. When you are renting, I can guarantee that your landlord is doing just that! They are using this tax advantage to reduce their income and pay less taxes. (They are also getting the other benefits listed here, while you are paying them to do it!)

3. 🔒 Stable Monthly Payments

With a fixed mortgage, your principal and interest payments stay consistent, unlike rent which can rise each year. Most lease agreements have a caveat that they landlord can choose to raise the rent at any time, usually when the rental contract is renewed. So if you sign a 6-month or 1-year lease, they have the ability to raise you rent at that time. If you finance a home with a fixed rate mortgage, your monthly payment doesn’t change for the life of the loan, usually 15 or 30 years, no matter what your income becomes down the road.

4. 🛠️ Freedom to Customize

You have complete control to decorate, renovate, and personalize your home however you want. You can change colors, inside and out, hang pictures and window fixtures, redesign bathrooms and kitchen, and so much more to truly express your personality. Properties that are owned by other people require you to live inside of their standards.

5. 📈 Building Equity

Each payment increases your ownership stake (equity), creating a financial asset you can use in the future. As your equity increases so does your wealth. You can borrow against that ownership stake at a much lower interest rate because it is a secured loan with the ownership stake as collateral as opposed to a credit card that is an unsecured loan with interest rates in the 20% range. Or you can hold on to that equity and use it toward the purchase of your next home. That is how you increase the value of the home you live in without increasing the payment. If you buy a home for $300,000 and sell making a $200,000 profit, you can now by a $500,000 home for the same payment as the first house.

6. 🤝 Stronger Community Involvement

Homeowners are more likely to stay in one place longer, which helps build relationships with neighbors, participate in local events, and feel a stronger connection to the community. Establishing roots in a community can lead to all types of advancement in social groups, child development, even career success. Homeowners are more likely to be involved, participatory citizens as well!

If you still believe that renting your home, the place you should be spending a majority of your time (not work), is more economically beneficial, I can sometimes understand that argument. Rent rates in Charlotte can average from $1650 – $1870 per month. A mortgage payment for a $350,000 with only 3% down ($10,500), including taxes, insurance and PMI, will run you about $2800. HOWEVER, I know at least 6 ways we can get that monthly payment down! This is where many people get stuck. So let’s zoom out and look at it from a wealth perspective. In a rental, you run the risk of your payment going up every year. When you own, you have the ability to refinance and lower your payment. Renting is just throwing money away and into someone else’s wealth. Ownership has many more benefits!