Owning a home isn’t for everyone, but there are some great tax benefits for people who do. Building equity is a popular reason why renters decide to become homeowners. Paying a mortgage allows you to build up equity in property that you can realize when you sell. And when you do sell, profits you make from the sale are tax-free up to certain limits. Homeowners may also be able to deduct the cost of mortgage interest and property taxes as itemized deductions.
Owning a home makes sense if you know you are going to be in it for at least several years. Banking on appreciation over a short-term is risky. Plus, selling a home is expensive, so you need enough time to get an appreciated value to cover the commission and other selling expenses.
Everyone’s situation is different. Think long and hard before you decide to buy. Make sure it is the right strategy for you, but rent is expensive. You don’t get any deduction, build any equity and have no asset to show for the outlay of cash.