The COVID-19 pandemic has shone a light on the vital role safe and cozy homes play in our lives. As well as providing much-needed shelter, our domestic spaces are quickly doubling up as offices, homeschools, and much more. In an unpredictable world, purchasing a home to call your own represents one of the best ways to inject a little stability into your life.
It’s no wonder, therefore, that many Americans have been splashing their hard-earned cash on new properties in recent months. According to figures from Pew Research Center, the number of homeowners in the US increased by 2.6% in 2020, a growth rate not seen since the mid-1960s.
As the housing market booms, you may be wondering whether to purchase a new home or holiday property soon. To help you make up your mind, we’ve put together a guide to the many benefits of homeownership. Whatever your budget, there are plenty of good reasons to bite the bullet and make an offer on your dream property.
What are the financial benefits of homeownership?
Handling your finances can be a mind-boggling process. In purchasing a home, you can rest assured that your decision will enhance your financial security in the long term. Here’s why:
1. You don’t have to rent
If you’re able to put down a generous deposit, homeownership is typically much cheaper than renting. Just think about how much money you pour down the drain every year while renting. With a mortgage, you can stop handing over your earnings to landlords and invest in your future.
2. You can control your expenditure
Mortgage repayments are more predictable and easier to control than rental charges. Depending on your contract, your landlord may be able to increase your rent when it suits them. Even worse, they could take your home off the rental market and force you to find somewhere else (and possibly more expensive) to live.
3. You will build your family’s net worth
Are you hoping to build a stable financial future for your kids and loved ones? Homeownership will boost your family’s net worth and offer some protection against future economic crises.
4. The value of your home may appreciate
In a strong property market, the value of your home will rise and boost the overall health of your finances.
5. You could rent it out for a while
Are you looking for a holiday home or planning to live away from your primary residence for a long time? Renting out your home while it is unoccupied can generate a significant amount of income and bolster your bank balance. It’s a win-win!
6. You can always downsize in the future
Looking forward to a laidback retirement after your kids have moved out? Once your working life is over, you have the attractive option of downsizing and living off the capital from your previous home.
What are the non-financial benefits of homeownership?
Beyond financial planning, there are plenty more ways to improve your quality of life by investing in a home. These include:
1. You can decorate your home in line with your preferences
Most landlords impose restrictions on tenants’ abilities to decorate their living spaces. When a property is yours to own, you can feel free to get creative and make home improvements to your heart’s content. Fancy installing a bright green carpet or a new set of windows? Don’t hesitate to make your mark!
2. You can boost the value of your property through home improvements
As well as allowing you to personalize your living space, home improvements could significantly increase the value of your property. If you decide to move, you will enjoy an impressive return on investment.
3. You can adopt the pet you’ve always wanted
Many landlords ban pets from their rental properties, preventing tenants from adopting a fluffy friend. As soon as you’re on the property ladder, you can adopt a pet safe in the knowledge that you will always have a home for it.
4. You are likely to experience psychological benefits
Navigating the rental market can take a psychological toll. The prospect of eviction or excessive rent increases can be very stressful, particularly if you have a strict or demanding landlord. Homeowners also tend to feel closer to their communities and more willing to mix with neighbors. In the long term, these community connections can reduce feelings of loneliness and anxiety.