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10 Reasons Why Homeownership May Be The ONLY Secure Investment Out There

We all remember the childhood book “The Giving Tree,” by Shel Silverstein. In it, a big tree gives everything it has, until it is just a stump to sit on. The tree is not really appreciated all that much, and has a life that is really just in service to others. I am shortening and just extrapolating the minor relevance of one of the greatest childhood books I can remember, by a great author.  I do recommend you take a few moments one day and read that book, because it closely parallels how I feel about the average American home.

I would like to compare owning even what some term a “starter house,” to owning a giving tree.   Home ownership is the smartest move a person of any age can make.  Because sometimes a person is not necessarily a twenty something ingénue when they are ready to do home investing.  So even if you are 50 years old – if you can find a way to get a down payment together, you should seriously consider home ownership.

1.) The first reason that homeownership is smart, is because you are paying yourself every month, even when you make a mortgage payment or tax payment to live there.  Instead of paying rent to a stranger and never having any (even remote) equity in that relationship, you do have a return on investing when making payments.  Why?  Time. Time is the factor that means your loan will diminish, your home value will increase, you have more equity, and you get the tax write off up to $10,000 of your property taxes each year.  You can also write off your mortgage interest –directly off your gross earnings, year after year, to reduce your tax base. You don’t have any of that benefit as a renter.

2.) The second reason to own a home is guaranteed shelter.  Shelter is at that top of the human needs pyramid. You may recall viewing one of those charts over your life time.  Landlords kick out tenants all the time.  Frequently, in my line of work, a tenant will gripe, and tell me it isn’t fair –and I’m thinking, it is fair.  When you rent –you are signing up for a temporary housing situation, all the time.  They are generally written for one year, with no guarantee of continuance. Renting has NO guarantees of continued security, and rents go up –in some states—without any restrictions.  So your landlord can change your rent from $1000 to $2000 a month, and where do you go from there?  When you own a home –with a mortgage or without –you are in a far greater position of control of your living situation. If you have a family or significant other—this shelter is a necessity, and with children in school or a spouse needing housing close to their job –sometimes a real hardship if it isn’t secure.

3.) The third main reason owning a home is smart, is because you have, what I call, an enforced savings situation. You are paying your future self.   Each month, when you are forced to pay a mortgage, it is almost always much cheaper than renting.  And, although home prices sometimes dip, over any kind of time chart, values go up, and up and up.  You are saving money, and most times –money you would never have put aside otherwise.  Our parents bought homes at $18,000 or $28,000  — today what car prices are!  That was 30-45 years ago.  Well, if you buy a home now, in your twenties—just imagine what that home will be worth in your late fifties or early sixties.  Your home is a virtual cash cow!  Your home is a silent giving tree.  It is there, just giving you savings, shelter and comfort, peace of mind and an increase in your net worth.

Other good reasons to own a home include: 

4.) Having a say in the interior and exterior of home décor and design. 

5.) Never having to worry that a landlord or stranger will open your door and have a legal right to enter your domain. Because with a rental, a landlord or their agent, can enter your home with just 24 hours notice and in an emergency –with no notice.  That’s like staying a teenager forever! Do you really want to have your privacy interrupted like that?

6.)  Being able to loan against your home, with an equity loan, for an unexpected future expense, is a safety net that is very smart to have in your corner.

7.) Being able to make improvements yourself, with your own labor, that will result in what some term “sweat equity,” and gives a return to you with a higher sale price when you sell.  If you do improvements on a rental –that only helps a landlord out.

8.) An increase in confidence.  Homeownership, without a doubt, gives a person knowledge that they own a very large, tangible asset.  Expect to have others respect you more and know that you are person who is clearly smart and thinking about their own safety and future.

9.) Home ownership (even if leveraged with a bank loan), is the most creative and flexible asset that a person can have.  Owning entitles the deed bearer to: rent it out, to loan against it, or sell it.  Unlike owning stocks or bonds –where the market determines value and a company can change financials at any time –with real estate—you have a 3-D, physical asset, that you can see, touch, feel and with fresh grass, actually smell.  Even if the housing market dips or settles –you still have a home to live in, a warm or cool shelter, a place to host holidays, a lawn to grow vegetables, fruits or herbs on,  plant a tree, raise chickens, have a garage, fix your car in the driveway, and so on.  The giving tree, your home, is there for you—after a breakup, after a death in the family, after a job loss, after a child leaves home, and that comfort and continuity breed a stability that no other asset can create for you.

10.) Home ownership is one of the many gifts of a free society.  To own a home in America, and to have that freedom, is a huge benefit. It is liberating, and freeing and I highly recommend it!

The author is Carolyn Mac Evoy, Broker of Mac Evoy Real Estate Co., a 2nd generation real estate firm, started in NJ and continued in Florida. Should you be needing housing or commercial property or farm land in Florida, please contact her at: carolyn@macevoy.org or by calling  772.925.4791.

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