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Top 10 Benefits of Home Ownership


When you’re first starting out as a young adult, you may take for granted that you’ll be moving from place to place as you establish your career or seek out new adventures. At some point, however, you start to settle down, perhaps in a job you love or because of a new relationship. At that point, you may begin to think about homeownership and wonder if it’s time to put down roots.

You probably have a vague sense that owning a home is a “grown-up” step to take or that it is, in general, a smart move financially. But, you may not realize just how many benefits come with homeownership. Here are a few of our favorites.

1. As a homeowner, you have the opportunity to build equity.

Perhaps the most important benefit of homeownership is the ability to build equity over time as you pay off your mortgage. Unlike rental payments, which go to pay your landlord’s mortgage, the payments you make help you to pay off your own home and build a more secure financial future.

2. Homeowners have a greater chance of building generational wealth.

According to the Federal Reserve, homeownership is positively correlated with higher net worth. Homeowner net worth is, on average, 40 times higher than that of renters. For homeowners who wish to pass on a valuable asset to their heirs, homeownership is an important part of the equation.

3. Homeownership offers a variety of tax advantages.

With potential tax deductions for mortgage interest, property taxes, and other costs related to your home, the tax advantages you’ll derive from homeownership can be among the most generous. This is especially true early in your mortgage amortization period when more of your payment goes toward interest. Please consult with a tax specialist to see if this applies to you.

4. Your heirs may experience inheritance advantages.

If your home appreciates over time, your heirs may benefit significantly from your choice to purchase a home. That’s because they may inherit the property at it’s stepped-up, appreciated cost without having to pay taxes on the additional value. Few investment vehicles offer this advantage. Please consult with a tax specialist to see if this applies to you.

5. You’ll be better able to control your space — both indoors and out.

Tired of looking at that paint color in your rental? Want to get out there and start a vegetable garden or plant a new tree? When you’re a tenant, you are limited in your choices regarding home decorating and landscaping. As a homeowner, you call the shots, so you have more freedom and flexibility to make your home your own.

6. You have the opportunity to add value to your home.

Do you have an eye for design? Do you have a talent for improving your space? When you spend money making your home more appealing and user-friendly, you add value that may eventually come back to you in the form of increased equity or higher sale price down the road.

7. You may experience increased housing stability.

When you rent, your landlord has the option of raising the rent each year or two whenever you sign a new lease. Eventually, that may price you out of your local market or cause you to move to find a more affordable place every few years. When you own your home and finance it with a fixed-rate mortgage, the consistent payment schedule may allow you a more stable and affordable place to live.

8. You’ll have a hedge against inflation.

Similarly, rent is subject to market conditions and inflationary pressures. If your neighborhood suddenly becomes more desirable, for instance, or the owner makes improvements, the cost of living in your rental may go up as well. However, when you are a homeowner, that long-term fixed-rate mortgage allows you to remain in your home at today’s purchase price for decades to come.

9. You may be able to explore rental options.

Is there space over your garage for an apartment? Do you have room in your backyard for an accessory dwelling unit? Is there a basement walk-out that you could convert into its own living space? As a homeowner, you have the option of optimizing your property to take in a tenant of your own. That can provide additional cash flow and could help you pay off your mortgage even sooner than you expect.

10. You’ll be part of the community.

As a homeowner, you’re simply more invested in the local community. You have a say in the HOA or condo association, and, as a taxpayer and property owner, your opinion carries weight with the town council or school board. Since you’re likely to stay in your neighborhood for the long haul, you’ll get to know your neighbors as well and become a more active participant in the life of your town.

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Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5