As an example, let’s look at a $200,000 home. Unlike your rental unit, your home should appreciate over time. Instead of assuming average growth, we assume that prices are flat in the first year of ownership and pick up, but only slightly, in the second year. In the third year of ownership, your home has appreciated to a modest $210,858. After ten years, assuming a return to an average 4.5 percent appreciation rate, your $200,000 home will be worth $286,948. Not only do you earn a rate of return on your original purchase price, you also get a return on any subsequent appreciation. More than two thirds of American households own their own home. They know the benefits of homeownership, from the accumulation of home equity, tax incentives, and the pride of owning a place of their own.
Why Rent When You Can Own a Home?
The “numbers tell the story” example should ease your mind about the financial aspects of becoming a homeowner. But there are other, less monetary, benefits to homeownership. Several research studies indicate that homeownership adds to the value of communities, has positive effects on children, and even contributes to increased voter participation rates.
As always, your thoughts, questions, or comments are greatly appreciated. Let me know if I can help with any of your Charleston, SC real estate needs or questions.
“Carolina Joe”
