Benefits of Owning a Home versus Renting 1 of 6: Build Equity

Benefits of Owning a Home versus Renting 1 of 6: Build Equity

As a real estate professional, I understand the value of homeownership, and one of the biggest advantages is building equity. For those not familiar with the term, equity is essentially the portion of your property that you truly own, calculated after subtracting what you owe on your mortgage from the home’s market value. Imagine your home is worth $400,000 and you have a mortgage balance of $150,000; that gives you $250,000 in equity, much like money in a savings account.

Now, let’s talk retirement. Most of us in America dream of retiring one day, and when that time comes, you’ll still need a place to call home. Here’s where owning shines: if you lock in a 30-year fixed mortgage, your monthly payments remain constant, unlike rent which typically increases over time. Plus, you could refinance to a lower interest rate if it’s advantageous, potentially boosting your equity even further. Historically, since 1968, U.S. home values have appreciated between 2% to 4% annually, sometimes even more.

At the crux of it, owning a home rather than renting means you’re not caught in an endless cycle of rent increases. Once your mortgage is paid off as you approach or enter retirement, your primary housing costs reduce to just property taxes and insurance, which in most scenarios are far less than rent payments.

Building equity is just one of six compelling reasons why owning a home, trumps renting.

Ready to start building your wealth through homeownership? Contact me to discuss how you can begin this journey.

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