With the right buying decision, homeownership can bring about financial stability, tax benefits, a greater sense of community, and freedom to make the home your own. Homeownership may not be for everyone, so consult a Funkhouser Real Estate Group representative to see if this path is right for you.
Despite the recent downturn of the real estate market, housing continues to be a good long term investment. Most buyers plan to own their home for five or more years. During this time, the homeowner should realize appreciation in the value of their property and gain equity as they pay down their mortgage. Let’s look at a local example of appreciation and equity increase over the past ten years.
Assuming a purchaser bought a home in Harrisonburg in 2002 for the median price of $136,628 with 20% down on a 30 year fixed mortgage at 6.54%, their initial investment would have been $27,325. Today, the median price of a home in Harrisonburg is $192,000. This homeowner would have realized appreciation of $55,372 and total equity of $99,244.
Recent news has kept the benefits of the mortgage interest deduction in the headlines. Yes, it is true that you are able to deduct from your taxes the interest you pay on your mortgage. As a homeowner you can also deduct the cost of your real estate taxes and realize exemption from the capital gain tax on the sale of your residence. Contact your accountant for more information on the tax benefits of homeownership.
A Sense of Community
Homeownership brings a sense of pride in both your home and your community. Various studies suggest that a higher homeownership rate brings lower crime rates, higher property values, better educated children and ultimately closer communities. Investing in a home may also mean investing in your family and your community!
Freedom to Make It Your Own
Have you recently been inspired to change a wall color or plant a garden? If you are currently renting your home, you will most likely need approval from your landlord to make any changes to the property. Additionally, you will not see a financial return on your improvements. As a homeowner you will have the freedom to improve and change your property. Enjoy the gratification of a weekend project and adding to your investment.
Homeownership has a positive impact on our local economy. According to research by the National Association Realtors, every purchase of a home contributes about $60,000 to the economy. Think about all of the services and products touched by a home purchase. They include the industries of insurance, furniture, gardening, home improvement, building, mortgage and others. Research also suggests that for every two homes bought, one job is created.
Purchasing a home may be a great investment for you, your family and our local economy. Consult your Funkhouser Real Estate Group representative to find out if homeownership is right for you.