Here are the five best benefits of homeownership in California.
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As a real estate agent, I’m a big believer in homeownership as a path to building long-term wealth. However, you don't just have to take my word for it. Today, I’m sharing five amazing benefits of owning a home:
1. Appreciation. Here on the West Coast, we have high appreciation rates. Over the last 40 years, the average appreciation rate has been 5.25%. Even during lower times, appreciation is still one of the best ways to gain wealth. If you buy a home and its value goes up 5% or more every year for the many years that you own it, that's a substantial way to build wealth just by living in your house.
2. Equity. When you rent, you're making a monthly payment, but when you buy, you're building equity. You're paying down the principal while gaining appreciation, which builds equity. This is a forced savings plan, which is a great way to build wealth over a long period of time.
3. Predictability. Rent prices have been going up across the nation, and in California, they can increase as much as 10% a year. With a 30-year fixed mortgage, you know what your monthly payment is going to be every month for the entire term of the loan. This is a great way to make sure your budget stays in line, and that you know exactly what your payments are.
"Rents in California can increase by as much as 10% per year."
4. Freedom. Owning your own home means you can make your own decisions about how you want to decorate, expand, or modify it. As a renter, you don't have this freedom.
5. Taxes. Homeowners get to write off closing costs, property taxes, and part of their principles. This is an amazing way to build wealth, but renters can’t take advantage of these tax benefits.
The truth is that if you plan on staying in a property for three or more years, it makes more financial sense to buy than rent. If you have questions about this topic or anything else, please call or email me. I am always willing to help!
