There is nothing compared to the feeling of buying your first home and it is a dream for many Australians. It’s a significant time in your life when you finally have a space to call your own and you can join more than sixty five per cent of Australians who own their home.
Although buying and owning your own home can be a daunting experience and may be the biggest financial outlay you ever make, there are so many benefits that it is worth considering. When done properly, the positives of being a homeowner far outweigh the negatives. From limiting your financial risk to increasing your investment power and saving you tons of money in the long run, here are some benefits of buying your first house.
Although your home mortgage payments may be higher than what you pay for rent, consider that owning a home is one of the most effective ways to grow your investment portfolio and achieve financial security. Buying a home is considered an investment because unlike a car and other assets that decrease in value, the value of a home actually appreciates over time. This is especially true in Australia where real estate value tends to grow faster than inflation rates. In fact, several economic studies have found out that Australians are 2.5 to 4 times better off as owners rather than as renters.
Stability to stay
All renters are subconsciously aware that the house isn’t theirs and they will have to leave someday once their lease is up. Most Australian rentals often have short residential leases that typically run for six to twelve months. This can cause a lot of anxiety for renters especially at the end of the lease as moving can be a major inconvenience and a financial and emotional burden.
When you own your own home, you’re rarely at risk of having to move any time soon and can plan your life and your dwellings accordingly. Not to mention the annoying regular house inspections are a thing of the past.
You’re also more likely to stay where you are and connect with your neighbours and immediate community when you own your place, which leads to significantly better wellbeing and feeling connected.
You don’t always have a lot of options for modifying your living space to better suit your needs if you are renting. In most cases, renters need to ask the landlord for permission before carrying out any major decorations— or even minor alterations such as hanging hooks on the wall— that could help make your place feel like home. As a homeowner, you can do whatever you like to your living space and decorate your house just the way you want. Better still, most home improvements and renovations often help the home to increase in its value and resale ability.
First homeowner grant
As a homebuyer in South Australia, you may be eligible for grants and concessions on your first house. In particular, the First Home Owner Grant (FHOG) which is a once off grant that eases the financial burden of purchasing a new home. Find out if you meet the FHOG criteria.
Long term value
Mortgage repayments are normally larger than rental payments. But this doesn’t mean that buying a house is a losing proposition since the total value of your property will eventually grow to cover any rates, fees and taxes you have to pay for owning your property. Generally, the growth in value of residential property is often around nine per cent, which is a far higher return than term deposit interest rates or most other investment strategies. Purchasing a home is a steady long term investment pursuit.
When owning a home, you will accrue equity, which is the prospect you have to purchase more real estate or expand on your current property. Equity is a significant benefit of a mortgaged property.
As you pay off your mortgage, the principal amount that you owe (which is the total amount you owe minus the interest) is reduced meaning you actually own more of your house. That equity gives you the advantage of redrawing or refinancing on that loan to invest in your house or buy a second or more valuable property; further enhancing your investment.
Buying a home is a great asset that comes with a lot of social and financial benefits and can be the perfect living and investment choice for a lot of people.