Home ownership still has
By Louise Bolger
SUN STAFF WRITER
The real estate market in Manatee County
is exploding. Investors are buying up pre-construction properties
as well as existing properties hoping to turn a quick profit.
But not every potential homeowner is an investor and not every
potential homeowner is only interested in what his house will
be worth next year. Some people actually buy a home to live
in and there are excellent reasons to do so.
Tax deductions: The most popular government giveaway by far
is the deduction of mortgage interest and property taxes on
your annual income tax return. This fact alone makes home
ownership a goal that everyone should strive for. Even retirees
and people on fixed incomes should consider carrying a mortgage
on their homes (after talking with their tax consultant, of
course). It could save you money every year.
Appreciation: Our staggering appreciation rates may not be
around forever, but even if things slow down, owning a home
is still considered a safe, steady investment with values
that rise while debt amount drops. Harvard Universitys
Joint Center for Housing Studies found a dramatic increase
in the rate of return on housing the longer its held.
A buyer who makes a 10 percent cash down payment with an annual
home appreciation rate of 5 percent could expect a 94 percent
return on the cash after three years of homeownership. After
five years, the return increases to 225 percent and after
10 years, a whopping 623 percent.
Equity: The portion of property thats actually owned
increases as you pay off the principal in the mortgage. This,
accompanied by the appreciation factor, frequently can lead
buyers to better second homes. Remember, even if your home
never appreciated, you would still be building equity as your
mortgage principal is reduced.
Borrowing power: Owning a home gives you the ability to obtain
lines of credit or loans for home improvements, emergencies
and school tuition.
Stability: A fixed rate 15-, 30- or 40-year mortgage gives
homeowners the comfortable feeling of knowing exactly what
their mortgage payments will always be.
Your property taxes may go up, but your mortgage wont.
Freedom: Why is home ownership the great American dream? It
is because in your home you can paint the walls any color
you want, plant as many vegetables and flowers as you want
and make the improvements you want. Naturally, if your home
is a condominium, you are subject to more rules than single
family homes. You do give up certain freedoms when choosing
to live in a condo, but the pay back is freedom from mowing
lawns, exterior painting and cleaning the pool.
According to the National Association of Realtors, record
numbers of Americans have purchased a home in recent years.
U. S. Census data for 2003 show a total of 68.3 percent of
Americans are homeowners. The hot, investor market may cool
down soon, but people will still buy homes in which to live
and raise their families will occasionally give in to the
temptation to count their mental equity.