This is part one of a three part series on the benefits of home ownership.  If you are considering making the move from the renting phase of your life and would like to transition to the home ownership phase then I hope this helps you make your decision.

Leveraging Your Money 

One of the financial benefits to buying a home is the leveraging of your money, especially in Seattle. Basically, leverage gives you the benefit of using a small down payment to make a big investment. You can yield huge profit on a small front-end investment. For instance, if you purchased a $600,000 home with 5% down, you leveraged the $30,000 down payment to purchase an asset worth 40 times that amount! 

Real Estate Appreciation 

The advantages of leverage really become obvious with appreciation, or the increase of net worth of a property. For example, if you paid $30,000 down, on the same home from the previous example, and occupied it for 5 years and had a modest appreciation of 3% a year your home would be worth over $694,000. By only investing 5% down, you can still indulge yourself in the full appreciation value. That is a gain of $94,000 on your initial investment of $30,000.  That is just a modest appreciation, while yes we are bound to have a couple of flat years approaching, here in Seattle we have experienced 10% and even higher in some areas.

Tax Savings 

You may constantly hear many people complaining of how their mortgage payment consists of so much interest. In the beginning this is very true. You must keep in mind that interest, as well as property taxes, are tax deductible and will directly reduce your taxable income. In Seattle, the average homeowner pays around $2,000 a month, $24,000 a year in interest and property taxes, in the first few years of owning their home. At a 28% tax bracket, that is $583.34 a month or $7,000 a year saved on income taxes. The Guide To Seattle Real Estate

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