When it comes to investing your money, finding the right long-term investment is often at the top of your mind. There are a myriad of investment options out there, from stocks and bonds to mutual funds to real estate and so on. While each one of these have their own benefits, there is one that outshines the rest. Real estate is one of the best long-term investments you can make, and here’s why:
You can’t live in a stock, but you can certainly live in a home.
Not only are you able to invest your money in something that will increase in value over time, but you can use it while it does. Although a stock or bond may increase over time, you don’t realize any benefit from the value increase until you sell it. However, when you invest in something like a home, you reap the rewards daily and long before the time comes for you to event consider a sale.
It’s an investment that will appreciate over time.
As we mentioned above, a home will appreciate over time. On average, the price of existing homes increased by 5.4% annually from 1968 to 2009, according to the National Association of Realtors®. That means a $20,100 investment becomes a $185,200 asset—and you get to live in it every day.
You can claim tax deductions with this type of investment.
You can deduct many expenses when it comes to being a homeowner. Your mortgage interest is one of the biggest deductions you can make each year, alongside your property taxes and other itemized deductions you may make. Additionally, thanks to the current capital gains laws, you may not have to pay taxes on that increasing value we mentioned above. (Dream Builders Realty does not give tax advice and encourages you to consult a tax professional for information regarding tax benefits, deductions, etc).
Everyone needs somewhere to live, so you might as well own the home you’re living in.
Why continue to pay rent to someone else, and ultimately “throw” away money each month? By buying your own home, you’re investing in your future, not someone else's. No offense to our property investors—we love you, too!
Stability for you and others around you.
There are many social benefits of owning your own home, beyond the fact that you’ve invested in your own future by making this purchase. Studies have shown areas with higher homeownership rates also become the beneficiaries of increased civic involvement, higher property values, and a higher overall quality of life—something we are all looking for.