6 top benefits of owning a
home -- Page 2
- Equity: The portion
of property that's actually owned, or equity, also rises over
time. "Owning a home allows you to build the equity that
accompanies appreciation," explains Timothy Spangler, CEO
of a real estate investment company and author of "From the
Rat Race to Real Estate." He adds, "You can't build
equity if you are a renter." Moira Cotlier of New Haven,
Conn., is a good example. "We paid rent to landlords for
nine years before buying our house. Nine years," she says.
"Do you know how many tens of thousands of dollars that was
for places we had no stake in? What a waste!" Since 2001,
she and her husband, Keith, have been paying themselves instead.
Mary and Rich Hallahan, who own a Madison, N.J., home, think of
the investment this way: "You are forcing yourself to save
by investing in an asset over time," she says. Their home,
purchased in 2002, has appreciated by about 10 percent since then.
What's more, a first home often leads to a better second home.
Equity buildup and appreciation in a first home help in the transition
to a second. According to the NAR, first-time home buyers' median
down payment is 3 percent; repeat buyers, meanwhile, put down
power: For owners who opt to stay put, equity still comes in handy. It
can be used to secure a loan or obtain a line of credit, meaning "more buying
power to fund home improvements or to assist with the purchasing of investment
property," Spangler says. Cash for emergencies or big-ticket items is also
generally have no idea what they'll be paying a few years down the
line. Home owners with fixed-rate mortgages, however, essentially
have the same payment for up to 30 years. Even those with adjustable
rates have a cap and can figure out their maximum potential mortgage
payment. The stability also comes from the sense homeowners get
of being anchored to their community. "It gives you a little
more leverage when it comes to community issues and activism,"
Cotlier says. "When you own your home, and you're paying taxes
on it, you might have your voice a little better heard when it comes
time to speak up about neighborhood or community issues."
up within your home is also much easier when you own it. No need
to worry about "the downstairs neighbors complaining you're
too loud, or the upstairs neighbor stomping around at 1 a.m.,"
says Sandy O'Keefe, who rented for about eight years before purchasing
a Mansfield, Mass., home with her husband, Rob, in 2004. O'Keefe
also appreciates the decision-making autonomy. "You ...
pick every paint color [and] won't get fined for scratches on the
wall," she says. The decision-making extends to the yard as
well. Cotlier sums up the homeownership benefits in one word: roots.
"You can plant perennials and enjoy them forever. You can plant
a tree and watch it grow and grow. You can plant a family and watch
Ezarik is a Connecticut-based freelance writer.