The not-so-obvious benefits of owning a home

Have you seen the home of your dreams up for sale and are not sure if you should make the bold move of putting in an offer? If your finances are in order, and the going price is affordable, here are some not-so-obvious benefits of owning a home that may help you build up the courage to make this life-changing decision.

Building generational wealth

A family home is the heart of a family, where all memories are made and cherished. But a home is more than that. Once you pay it off, you can leave it to your children in your will. They can then use the money made from the house as a deposit to set their young families up with a home of their own. This is called generational wealth because it is passed on to each generation to give them a head start in life. Instead of starting from scratch with a house, your children will have a foundation to build on.

Emotional security and peace of mind

Research has shown that owning a home can positively impact your psychological health because it gives you a sense of physical and emotional security, control over your life and safety. Your sense of belonging is deeper because you own the property you are living in.

Rental income tax benefits

Even though there are no direct tax benefits to owning a home, it is a long-term investment that will give you dividends in the future when it is a fully paid-off asset that belongs to you and your family.

If you own a rental property, as a landlord you are entitled to tax deductions for certain expenses related to the maintenance and management of your rental property such as repairs, rates and taxes, property management fees and interest on your loan.

Your property is your canvas

Once you own your property, you can change it, upgrade it, and renovate it as much as you want and without requiring permission from a landlord. The money you spend on improving your property will also give you a notable return on investment. In fact, the average return on investment for a home renovation in South Africa is between 60% and 80%.

Build community ties

When you rent, you know that your stay is temporary and therefore you are less likely to get to know your neighbours and any other community developments, projects or plans. Playing your part in community-building events will give you a sense of belonging and will build community ties. It also gives you a sense of security knowing the people who live in the same area that you reside in. The children build life-long friendships and families look out for each other.

Repayments are predictable

When you are paying off a home loan, you always know how much you will be paying every month. You are not at the mercy of a landlord who can increase the rent on a whim. Not all landlords are unreasonable, but you do get those who will increase the rent without any consideration for the tenant. When you buy, as long as you keep an eye on the interest rate, you will always know what your payments are, and they won’t increase substantially without warning.

Improves your credit score

For most homeowners, taking out a home loan means signing up for one of the largest sums of debt they will face over their lifetime. Over the short term, credit reporting agencies will drop your credit score – because you’ve just taken on a large amount of debt. However, after several months of paying your home loan on time and in full, your credit score will improve. In other words, taking on a home loan can temporarily lower your credit score until you prove to your lender that you’re committed to paying it back. At that point your credit score will increase substantially.

Now that you know all the not-so-obvious benefits of owning a property, you can make a more informed decision about buying that dream home!