Owning a home is great! It creates an ability to realize personal dreams and participate in a community full of other home owners. Home owners have a vested interest in the neighborhood they live in and owning a home can be a very valuable and profitable endeavor.
Buying a Home is the Addition of a Large Asset to One's Personal Holdings
A common statement that is heard on television and the radio these days is "your home is your biggest asset." It is true. Most people do not have the raw cash to put enough money into the stock market for it to be worth nearly as much as a home, especially those who are under the age of 30. Like buying a home, purchasing stocks and bonds for an IRA or personalized investment account is part of a long term plan.
The difference between the stocks and bonds and a home is that the value of the home is there at first purchase. When a person buys a $150,000 home they can do so at the cost of under $2,000 a month over 15 years. In that time a home is likely to increase in value while the payment over that time never increases. In contrast, an investor putting the same amount into the stock market would have to do so with funds after paying for a roof over his head.
If the stock increased in value/price the investor would not have received all of his gains from the first moment he purchased as he did not purchase all $150,000 of the stock up front.
Owning Offers More Freedom and Flexibility Than Renting
Renters do not have the freedom to transform their living space to suit them unless they have the express permission of the owner. This includes adding or taking away greenery to add curb appeal, painting a room a non-neutral color, and replacing a faulty fixture, such as a dripping shower head.
Home owners can do all of these things while adding to the value of their asset allowing them to enjoy where they live even more so. In economic terms, this is referred to as utility. A home owner has the ability to maximize his utility whereas a renter does not.
A Home Owner can Increase the Value of his Asset
Aside from fixing small things, a home owner can add a room onto a house (most landlords would seldom complain if a tenant did this), paint the bedrooms everyone's favorite colors, and update the appliances in the latest, most efficient manner. As a result he could possibly turn his $150,000 home into a $200,000 home overnight.
Peace of Mind
Getting back to maximum utility, home ownership provides peace of mind to the many who have purchased within their means. Knowing that a landlord cannot come onto the property, or into the home uninvited, or unscheduled (as some may) can be a relief. And so, while the children play outside on a playground built just for them, and a hammock is swinging between two trees as steaks and chicken are on the grill, owning a home can offer a completely different feeling than paying to borrow one from someone else.
Between it all, owning a home can be a dream come true.
For reasons not to purchase a home click here.
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