Benefits of Homeownership - Why You Should Buy A Home in California

What are the benefits to owning a home?We often talk about the How To’s of homeownership, like in our recent real estate e-book, but today we’re going to talk about the Why’s of homeownership. There are many benefits to being a property owner. Some might be obvious to you, others might not. Take a look at the list below and let us know in the comments section any benefits of being a homeowner that we might have missed.


Tax Write Off – You can write off the interest paid on your mortgage payment and the property taxes. At the beginning of an amortized loan, you will primarily be paying interest which can help offset some of the other initial costs of homeownership.

Equity – Equity is the difference between the value of the home and the amount owned on it. If your home is worth $500,000 and there is $400,000 in debt (money owed on your loan), you have built $100,000 in equity. In most cases, the higher down payment you put on a home, the more beginning equity you have. Actual equity can fluctuate if the value of your home appreciates or depreciates.

Appreciation is the gain in your home’s worth over time due to natural market forces. Some examples of natural market forces include inflation, supply and demand, and rise in value of an entire area.

Borrowing Power – When you own a home and have built equity, you can borrow money against the equity in your own home with a home equity line of credit. A home is considered your greatest appreciable asset and in most cases you will receive the lowest interest rate borrowing against your home than say, your car which depreciates in value.

1031 exchanges allow real estate owners to exchange property and defer payment of capital gains taxes until a later date. 1031 exchanges are only allowed on similar type properties, meaning, you couldn’t upgrade your home to a commercial investment property.

Home Improvements – When you own a home, versus rent, you can do anything you want to the home, as long as you obtain the proper permits and follow local zoning and ordinances. It’s also important to research the homeowners association if the home is part of an HOA. Renting does not allow the freedom of home improvement, however, looking at it in the other direction, you’d probably not want to spend money upgrading a home you do not own anyway.

Affordability – Given current market conditions in California, owning a home can be less expensive than renting. This is especially true if you consider the historically low interest rates available to many borrowers.

Selling Power – If you can get into a money crunch and have built equity in the home, you can either borrow against your equity as we mentioned above, or sell your home. If possible, it’s usually better to borrow against your home’s equity. If you lost your job but can still afford to make payments on your current home, that doesn’t mean you’d be able to qualify for financing on a different home.

Can you think of any benefits to home ownership that we missed? Leave your thoughts in the comments section below.

If you’re in the market to buy or sell California real estate, contact us today at 1-800-287-1808. We operate exclusively in California because we understand that being experienced in LOCAL markets is the only way to get the best results for our clients.

If you enjoyed this article, be sure to download our California Real Estate E-book [pdf].

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