According to Investopedia homeownership is an investment and,
The benefits of investing in a home include appreciation, home equity, tax deductions, and deductible expenses.
Another big benefit of owning a home is appreciation over time; according to Investopedia, appreciation is:
in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates.
Investopedia goes on to say that...
if you stay in your home long enough, there's a very good likelihood you will be able to sell your home for a profit because of appreciation later in the future
In fact, buying a home is one of the best long-term investments you can make.
But what about building equity? American Family Insurance explains what home equity is:
home equity is the difference between your home’s fair market value and what you owe on the outstanding balance of all liens. Also known as a real property value, your home’s equity appreciates when you make payments against the mortgage balance, or when your property value increases.
American Family Insurance goes on to say six good methods on how to build home equity. One of them being Increasing your down payment when buying a home
The most reliable way to build equity also happens to be one of the quickest ways. By increasing your down payment when you purchase your home, you’re putting more equity directly into your home.
Another great way of building equity is discovering unique sources of income, like revising your budget:
If you often hit up the local café for your daily latte, that amount adds up quicker than you think. Same goes for lunch! Instead of shelling out cash for a subpar burger and side salad, whip up your own recipe and munch on that all week. Mark your calendar and splurge once a month on dining out and get that cup of joe — you’ll save a lot of cash in a year’s time. Plus, it’s better for you!
American Family Insurance has more money-saving tips for your long term goals HERE
This small tip can add significantly to putting some extra money towards your mortgage, which in return helps you pay off your home faster and build more equity.
American Family Insurance has all six tips HERE that you can check out on how to build equity in your home
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