Homeownership has always been associated with the idea of the Canadian Dream. For a lot of individuals, owning a home can represent stability, financial success, and the opportunity to be a part of a community. There are many benefits associated with homeownership that range from social to financial, and these benefits have led to a steady rise of homeowners.
Benefits of Homeownership
Building Equity
Equity is the amount of value that you have in a given asset. As you continue to pay off your mortgage every month, you will be building equity in your home. This will differ from paying rent because you will be contributing to a physical asset rather than making monthly payments to your landlord. This is why purchasing a home is thought to be a financially savvy move.
Long-term Savings
By building up the equity in your home, you will also be setting aside money that you can put towards your future. This is because there are many ways to tap into your equity down the line. Studies show that homeownership rates peak at or near retirement age, suggesting that home equity contributes to retirement savings for many individuals. Therefore, when you buy a home, you are supporting your own financial stability.
Also Read: Common Things to Look Out for Before Buying Your Dream Home
Building Wealth
As time goes on, your property increases in value and so does your equity. This allows you to sell your home for a profit. You can use this extra money to reinvest in a new house, as well as an investment property. Plus, you can use your home to build wealth immediately, by using it as a rental property or by house hacking.
Keep Control Over Your Expenses
When you own your own home, you can be certain of the monthly payment that you need to make while living there. On the other hand, when you are renting a home you are faced with uncertainty since the landlord can decide to change it. Unless you change your mortgage terms, your monthly payment will stay the same throughout your home’s mortgage.
Financial Education
Not many people know that the financial knowledge that comes with owning a home will be passed down through generations. By demonstrating the financial skills needed to handle mortgage payments, parents are able to better prepare their children to make important financial decisions.
Health Benefits
Studies show that homeowners have higher self-rated health when compared to those who don’t own a home. Studies also showed homeowners have higher perceived control over their lives, and higher self-esteem and happiness ratings when compared to renters.
Also Read: Mistakes to Avoid When Selling a Home
Lower Crime Rates
Homeowners typically have more incentive to deter neighbourhood crime compared to renters because of their community and ties to a certain area. Areas with higher percentages of homeowners are therefore more likely to have voluntary crime prevention programs in place and lower rates of property crime than markets with high rental properties in the area.
Property Improvements
One big benefit of homeownership is that it offers individuals the ability to customize them. Homeowners can complete renovations to make their own home look exactly how they want it to, which can also lead to boosting the home’s value on top of that. As a whole, home-owned housing is usually more well-maintained than rental properties are. This also gives homeownership another benefit.
