When you ask for tips on investing your hard-earned cash, you will get loads of advice. Typically, some people would advise you to start saving early in your life while some would advise against the use of credit cards bearing high interest rates. However, it is tough to argue against the idea of investing in a new house as buying a home is one of the best investments you can make.
1. An investment for the future
With more and more mortgage payments over time, you end up investing in a future that is more financially secure. The amount that you allocate to these mortgage payments increases the equity of your home. You could think of this as value added to your future opposed to the rent payments that tenants make to their landlords which do not contribute to home equity as they do not own the place.
2. Low rates of interest
Home loans offered by banks are perceived as relatively safer investments compared to credit cards bearing high interest rates. Given the comparatively lower rate of interest on these bank loans, you are less likely to default on the home loan. Again, the idea that you are making these payments to add substantial value to your future would motivate you to keep going.
3. Boost in resale value
Another reason why buying a home is one of the best investments is the potential for an increasing net worth of the property. Generally, any place where people choose to live for longer time periods fetches a greater selling price than its purchase cost. Thus, it is advisable for you to spare sufficient time for exploring and surveying different towns, streets and neighborhoods before reaching a conclusion.
4. Tax savings on offer
While low interest rates on bank loans offer a good amount of savings, some extra cost savings can be achieved with timely mortgage interest payments. This is because these payments are tax-deductible, meaning you can deduct them against your income when computing your income tax. Besides the savings from lower income tax, you may also enjoy exemption from any capital gains tax so long as your primary residence occupied for over two years does not appreciate in value by over $250,000.
Consider these reasons why buying a home is one of the best investments and make sure you make a well-informed decision.
If you are looking for a home in Massachusetts cities like Boston or Newton or on the South Shore, I would love to help you in buying a home. Feel free to call me or send me an email or get in touch on Facebook. For more great tips and local information about Boston and the South Shore, sign up for my monthly newsletter. I promise I won't spam you.