Beyond the immediate benefits of home ownership (such as tax advantages), if you’re considering entering the housing market, you will also want to look at the longer-term benefits of owning your own property.
If, at some point in the future, you decide that you need more space and are able to afford a larger home, you may decide that renting out your existing one makes sense.
The monthly rental income will help offset some – if not all – of the expenses of maintaining the property and may actually put money in your pocket each month.
If there comes a point when the property is completely paid off, then the rent could be a great source of retirement income.
Source of equity
Over time, as the value of the property increases and your mortgage balance decreases, you’ll be able to tap some of the equity in your home with either a fixed-rate second mortgage, or some type of line of credit.
The equity may come in handy in the future for things such as home repairs and college tuition.
If you expect to be able to pay off your home at some time in the future, you may be considering downsizing to a smaller, less expensive home.
Your home equity may allow you use the proceeds of the sale of your older home to pay cash for a new, less expensive property, and you can deposit the remainder of the proceeds of the sale to provide retirement income, to purchase a vacation property, or for a host of other reasons.
For many decades, real estate has been one of the best places to invest your money, and despite the recent mortgage meltdown, it will continue to be so.
In many cases, it can even outperform the stock market.
Consider your mortgage as part of your long-term retirement plan.