In times of economic uncertainty, the wisdom of buying property remains unchallenged. Ask the 73 million Americans who currently own homes why they made the decision to stop renting. They will describe the numerous financial advantages and the personal satisfaction of investing in real estate.
Owning your home means that your monthly payment contributes to your own net worth instead of your landlord’s, as the equity in your property builds up over time. Real estate values continue to grow at an average rate of 10 percent each year, and during the last decade, most homeowners have reported even more dramatic gains. Furthermore, you home is typically a leveraged asset, that is if you purchased your home with a mortgage you likely did so with a down payment of less tan 20%. While you may have only put 20% down, you earn the appreciation on your homes total value and thus is you buy a $200,000 home the appreciation you would earn in that first year f ownership would be $20,000 (rather than $4,000 on your $40,000 downpayment). And a fixed rate mortgage ensures that you won’t be subject to periodic rent increases, so you can plan your monthly budget with confidence.
Low mortgage interest rates have enabled more Americans than ever before to realize their dream of home ownership and save on income tax. Homeowners can deduct 100 percent of their mortgage interest payments and their property taxes, and new tax law benefits have allowed many to sell a principal residence and bank tax-free profits of up to $250,000 per individual or $500,000 per couple.
Real estate is still the best investment!
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