7 benefits of owning your own home
Are you in debate as to whether to take the plunge and buy your own home? Owning a property will be one of the largest and most important decisions that you will ever have to make; however there are plenty of benefits to take advantage of.
It is important to remember that buying a property should not be rushed into as there is lots to consider, both financial and non-financial. However, if you have a deposit saved up then you should seriously start looking into buying a property instead of sitting on the fence and waiting for the “right time”, as there is no such thing is a right or wrong time. The only wrong thing is not doing anything at all.
To help make your decision easier, I have come up with 7 great benefits as to why you should buy a home today.
1) Low interest rates
As I’m sure you’re all aware, interest rates are at a record low of 2.25 per cent. This means that borrowing money is cheap making mortgage repayments much more affordable. This low interest rate environment may also mean that owning a home works out cheaper than renting, but you should also take strata fees, water rates and other costs into account.
2) Offers stability and peace of mind
Owning your own property gives you peace of mind for the future as you have a foothold on the property ladder and will own an asset. When you rent a property there is a level of uncertainty as to how long you can stay in this property. Rental tenants may only be able to get a lease for six months before having to move out so you are constantly on the lookout for your next home. The property owner may also be selling up meaning you may have to move out sooner, or urgent repairs are required so tenants are asked to leave.
If you are looking to live in a neighbourhood for at least five years then it makes sense to buy a property as it offers a sense of stability and can save on moving costs associated with renting.
When you retire, you don’t want to still be paying rent. Instead you want to be in a position where you own your own home mortgage-free. The earlier you buy a property, the easier this is.
3) Make it your own
One massive benefit of home ownership is that you can make your house a home. You can furnish it exactly how you like, hang pictures on the walls and even have a pet. In a rental property, there are generally strict rules in place and you no longer have to worry about inspections.
4) First Home Owner Grant
If this is your very first home, then you might be eligible for the first home owner grant, if you are purchasing new property or property off the plan. Each state in Australia has different rules, such as having to live in the home for at least six months; however it is well worth doing as you could potentially save $15,000 (New South Wales). Who wouldn’t want $15,000 tax free?
5) Capital Gains
Many people view renting as throwing money down the drain. Imagine how much you have spent on renting a property in one year alone. That’s money that could be put towards a house deposit. Instead of paying off someone else’s property, you could be using that money to buy your own property and take advantage of capital gains. As property tends to double in value every 10 years or so, this should be seen as a long term investment and ideally should be held for a minimum of 10 years in order to reap in the rewards. However, this of course is dependent on your property and the location.
As your property ages, you can make renovations and extensions to add value to your home. Just be careful not to over-capitalise on the work you do, to ensure it remains profitable when it comes to selling.
7) Tax benefits
If you purchase a property to live in as your primary place of residence then, when it comes to selling the property you are exempt from paying capital gains tax. Bear in mind though that if there are times you have not lived in the property, then you cannot claim for these periods.
With so many benefits available for home ownership, it makes sense to buy your own property. Not only does it offer you stability for today and the future, it also makes financial sense as there is potential to make a profit. However, with any large purchase you should talk to an expert to ensure this is the right time for you to buy (such as having a stable full-time job) and you have enough funds available that doesn't over-stretch your budget.
Published on 23rd of April 2015 by Marty Stanowich