and sell at the right time. Typically, U.S. home prices appreciate nationally at an average annual rate of between 3 and 5%. Renter disadvantage: Renting does not o ff er any equity-building advantage. Your rent payments go to the landlord and not toward your property ownership, regardless of how long you live there. 2. Increasing your home’s value. As I touched on, your home’s value will increase through natural appreciation every year, but you can increase your home’s value by not only maintaining your home, but also improving upon it, such as small renovations, fin ishing a basement or adding a bathroom, improving the home’s curb appeal, and making small improvements around the home (newer appliances, a fresh coat of paint, new curtains, etc.). Renter disadvantage: If you rent your home, you will likely have limits on what you can do to improve the look of your home; in fact, you might not have permission from the landlord to make any changes. Further, any changes you might make won’t increase the value for you, but rather for the property owner. 3. Controlling housing expenses. When homeowners select a fix ed-rate 15-, 20-, 25-, or 30-year mortgage, they have the assurance that monthly mortgage payments and overall housing costs will not increase over that period. Renter disadvantage: With renting, property owners are known to increase the amount of monthly rent and other expenses you must pay annually, and sometimes randomly, without much notice. You don’t have control over this. 4. Tax advantages of homeownership. As a homeowner, you qualify for major tax bene fi ts when you buy a house, both at the time of purchase and for the duration that you own the home. Homestead exemption is one example; many states exempt all owner-occupied homes (“homesteads”) from a portion of the property tax that would normally accrue over time. 10
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