Coachella Valley Blog

Despite what Wall Street wants you to believe, owning a home isn’t the same kind of investment as stocks or bonds.  What you get is a USE asset that depreciates over time while it grows in market value.  Just keep the home in good repair to maximize your investment.  Here are five reasons why you get more for your money with a house than the stock market.

1.  Leverage.  With stocks, you put in all your money for a little piece of a company.  With a house, you put in a little money to get the entire house.

2.  Tax benefits.  What other investment can you put in 5% of the cost of the asset, reap all the appreciation and pay no capital gains?  That’s rights:  live in your home for at least 2 years, and you don’t have to pay capital gains tax on up to $250,00 in appreciation if you’re single and a combined $500,000 if you’re a married couple.

3.  Control.  With a home, you have control - what you buy, how much you pay, and where you live.  You can improve the value with repairs and updates.

 4.  Lifestyle.  With a home you choose the neighborhood you want to be in, and the size and style of a home that fits your needs.

5.  Value.  Unlike some stocks, you house will seldom become worthless.  Barring a catastrophe, your home will retain a major portion of its value, even in the worst of times.  Housing has lost value only one year out of the last 35.  It’s more normal to beat inflation by 1% to 2%.

Let’s add a little perspective here.  You lost a greater percentage on the stock market this past year than if you owned a house.  And…..when it rains, which would you rather have over your head…a roof or a stock certificate?

 Exerpts from an article provided by Michelle Morris of Coldwell Banker Mortgage.