The benefits of leverage really become apparent with appreciation, or the rise in value of a property. Using the above example, say you were to live in the house for 5 years, and during that time property values in your area were to rise an average of 3 percent a year (modest for many neighborhoods in Seattle). Your home would then be worth over $347,000. By putting only 5 percent down, you get to enjoy the appreciation for the full amount! That is a gain of $47,000 on your $15,000 investment. And, in reality, the Seattle area has appreciated at rates much greater than that.

People always say that their mortgage payment is made up of so much interest. That is true, especially in the beginning. However, interest paid throughout the year is tax deductible (so are property taxes) and directly reduces your taxable income. The average homeowner in Atlanta pays nearly $2,000 a month in interest and property taxes in the first years of owning a home. That equates to a dollar-for-dollar deduction on your taxable income of $24,000 for the year! At an income tax bracket of say 28%, that is almost $7,000 saved in income taxes annually.

When you are a renter you can certainly expect your rent to increase each year - or even more often. If you get a fixed-rate mortgage when you buy a home, you have the same monthly payment amount for thirty years. Even if you get an adjustable rate mortgage, your payment will stay within a certain range for the entire life of the mortgage. Imagine how much rent might be ten, fifteen, or even thirty years from now? With foreseeable housing costs as a homeowner, you are able to make prudent investment plans knowing these expenses will not increase substantially.

When you rent, you are normally limited on what you can do to improve your home. You have to get permission to make certain types of improvements. Also, it just doesn’t make sense to spend thousands of dollars painting, putting in carpet, tile or window coverings when the main person who benefits is the owner and not you. When you own a home, however, you can do what you want within legal limits. You can choose to landscape, paint, remodel or have pets at your own discretion. Homeownership gives you freedom to make decisions about your home that you don’t have when renting. You also get the benefits of any improvements you make, plus you get to live in an environment you have created.

Renters can also be kicked out by their landlords when their lease is up. Suddenly they are searching the rental ads and spending time packing and moving. With home ownership, you know you will be in your house until you decide it’s time to move.

Both indoors and outdoors, you will probably have more space if you own your own home. Even moving to a condominium from an apartment, you are likely to find you have much more room available - your own laundry, storage area, parking space and bigger rooms.

Some people are just not the best at saving money, and a house is an automatic savings account. You accumulate savings in two ways. Every month, a portion of your payment goes toward the principal. This is called building equity. Admittedly, in the early years of the mortgage, this is not much compared to your payments - but it is better than nothing like paying rent. Over time, however, it accelerates. Secondly, your home appreciates. You can also make improvements to your home that add to it’s value.

A home reflects its owner’s values and lifestyle. Owning a home can provide you with a source of pride, enjoyment and satisfaction.