real estate thoughts

1. For a lot of people, just the idea of planting roots in a community is the strongest reason, by far. The other side of that motivation is the idea that no one can ask you to leave, that you can decorate any way you want, that you are in a "home", not just a house. If you shop well, you will have a place in a thriving community filled with wonderful people who share many of your same motivations for home ownership.
2. There is the "pride of ownership." When you rent a house, there is always that lingering sense that the landlord/owner can come at any time and claim the house for the landlord's personal use.
3. Saving for retirement is perhaps the next strongest reason, as each payment draws the buyer a little closer to a "paid up" house by paying part equity, part interest.
4. The fourth reason people indicate is "appreciation." We have seen this investment questioned lately, but over the long haul, real estate has proved to be an effective "hedge against inflation."  Make no mistake about it...real estate is a long term investment.  Ask anyone who has owned for 10 years.  I see homes that are significant assets, paid up over time, as an example:  A modest home in a nearby neighborhood, purchased 11 years ago at $140,000 just sold for a whopping $240,000 profit, with no tax liability...see reason 7.  
5. Mortgage interest deductions are a fifth reason some cite for buying a home, as they have high enough incomes to warrant a large deduction from their income for tax purposes.
6. Property tax deductions are another reason.
7. The capital gain exclusion of $250,000 from any gain, per owner if the property is held as a primary residence and lived in for 2 of the preceding 5 years, is yet another.
8. Use of the capital in home equity loans, as a deductible loan and a way to tap equity in the house.

 

The first three on this list probably make up the dominant reasons for owning real estate for the overwhelming majority of buyers. It's not uncommon for people to buy a house and begin to pre-pay the mortgage right away, the better to get the loan paid off. It's a device to help you control your retirement and to build a source of equity in your declining years. Most young people can't imagine that old age will ever come to them, but if they're lucky, it will.

 

 Some last thoughts;  invest like you'll live to see the value of it, dance like no one's looking and work hard for your community.