Although the real estate market has experienced its share of difficulties and struggles over the past, three years, it is still important to realize that owning a Dominion propertystill continues to be a smart investment. Here are the top reasons why buying a home is still a great investment:
- You pay less income tax – Because your home payments go directly to your lender for your mortgage (instead of to your landlord for rent payments), you can save thousands of dollars in income tax each year. This is because homeowners can deduct the interest of their mortgage payments, as well as their property taxes, when they file their federal income tax return each year. In addition to a single-family home, consider that purchasing a condo or even a mobile home affords you the same tax breaks each year.
- Your investment will increase in value over time – Although the housing bubble across the country burst (and in a big way) a few years ago, history shows that, over time, homes increase steadily in value, making them an excellent investment. Keep in mind, however, that the ultimate determination of your home’s ability to increase in value is the location of the home, so do your homework and pay attention to property values.
- The money you make on your investment is tax-free – Now, what other investment can offer you that? Consider you bought a home ten years ago for $200,000 and you sold it last week for $300,000; you just cleared $100,000, tax free! Federal law states that homeowners can make up to a $250,000 profit on their home, tax-free (couples who file jointly can make up to a $500,000 profit).
- Your home loan payment for your Dominion property is something that will never increase – Provided you have taken out a fixed home loan, you can expect your home payment to be the same in 30 years as it is today. This allows homeowners to be able to budget their household, both now and in the future. Consider rent payments, on the other hand: You certainly cannot depend on them staying the same!