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OF OWNING YOUR OWN HOME
As a fairly general rule,
homes appreciate about five percent a year. Some years will be more,
some less. The figure will vary from neighborhood to neighborhood,
and region to region.
Five percent may not
seem like that much at first. Stocks (at times) appreciate much
more, and you could earn over six percent with the safest investment
of all, treasury bonds.
take a second look...
if you bought a $200,000 house, you did not pay cash for the home.
You got a mortgage, too. Suppose you put as much as twenty percent
down – that would be an investment of $40,000.
At an appreciation
rate of 5% annually, a $200,000 home would increase in value $10,000
during the first year. That means you earned $10,000 with an investment
of $40,000. Your annual "return on investment" would be a whopping
Of course, you
are making mortgage payments and paying property taxes, along with
a couple of other costs. However, since the interest on your mortgage
and your property taxes are both tax deductible, the government
is essentially subsidizing your home purchase.
Your rate of
return when buying a home is higher than most any other investment
you could make.
If you are
moving to a home for the first time, you are going to be very pleased
with all the new space you have available. You may have to even
buy more "stuff."