3 Reasons For Home Ownership
by Ryan Williams
Operations Manager
1: Wealth Building
The #1 reason for homeownership is the opportunity to build wealth through real estate. Everyone has to live somewhere! And if you have the means to pay a mortgage rather than pay rent, you are investing in your wealth - not helping someone else invest in their wealth. How does this work out? Let’s say, you buy a home for $300,000. Most mortgages are paid over the course of 30 years. At the end of 30 years, you have an investment worth $300,000 which you can do whatever you want with. This does not even factor in appreciation! If you rented for 30 years, you would never see those 30 years of rent payments again. It was an investment in someone else’s wealth.
Homeownership is one of the primary ways everyday people can build wealth, save for retirement, and build an inheritance for their children.
2: Options
After you begin building wealth through homeownership, you begin to have options. Having options on what to do with your property is one of the most appealing aspects of homeownership. Options help you take advantage of opportunities when they arrive or meet your specific goals. There are so many options when it comes to homeownership, but we will list just a few:
Selling your home after it’s appreciated a few years.
Renting out your home, then buying another.
You can rent a room in your home as you live there, to make extra income.
You can pay your mortgage off sooner making extra payments. (This pro-tip saves A LOT of money in the long run!)
You can refinance your mortgage when mortgage rates lower.
You can take equity out of your home with a HELOC and use that to invest in real estate or start a business.
You can leave the property to your children as an inheritance.
Each of these options can help you multiply and accelerate your wealth. In order to have options, you must be in the game and be a homeowner.
3: Owner’s Mindset
In preparation for this article, I read many similar pieces about the pros of homeownership, and many of them highlighted “the pride of homeownership” as a reason to consider buying. While being “proud” to be a homeowner is not a bad thing, it isn’t the best reason to purchase a home either.
A better reason is to embrace an “owner’s mindset”. Plenty of people can be “proud to be a homeowner”, but still find themselves in bad financial situations. An owner’s mindset is to think in terms of “how do I make my money work for me?”
When you rent, the place where you live isn’t yours, and you are ultimately investing in someone else’s wealth. As you build wealth in your own home and learn about the options you have as a homeowner, you begin to take advantage of what may give the best return on your investment. You begin to think:
“We should rent a room in our home we don’t use for extra income.”
“Our home has appreciated 20% in the past 5 years, we should sell now!”
“We could rent our current home and buy another to make an extra $500 a month.”
“Rates have dropped, we need to refinance and we can save $300 a month.”
“Let’s increase our mortgage payments to be fully paid in 15 years rather than 30.”
Rather than going with the flow and investing for other people (i.e. renting), homeownership gives you an “owner’s mindset” that propels you to take advantage of the opportunities your property gives you.
The sooner you move into homeownership, the sooner you open yourself up to growing wealth, having options available, and taking an “owner’s mindset” with how you spend your money.
Taking the first step into homeownership can be intimidating and overwhelming. Our job at The Porter Group is to help you understand the process and show you how to take advantage of your situation via real estate.
