3 Financial Benefits to Being a Homeowner

Posted by Viviana Vazquez in HousingJune 9, 2021(Last Updated December 28, 2022)2 min read
Key Takeaways
  • For many, owning a home is the ultimate "American Dream."
  • Through homeownership, you can invest in your property for the long term, especially if you plan on raising a family.
  • There are three major benefits to becoming a homeowner. 
Are you ready to make some real money moves?

For many, owning a home is the ultimate "American Dream." Homeownership allows you to have a property to call your own, leaving you with a sense of pride, confidence, and security. Through homeownership, you can invest in your property for the long term, especially if you plan on raising a family.


There are several financial benefits related to homeownership. Here are three advantages and reasons to celebrate being a homeowner. 


Build Wealth


Owning a home is an investment. Historically, the rate of return that comes with owning a home average between 8.6-10% per year. This means that while homeowners live in their homes, the property value could increase along with their net worth each year. 


According to the Federal Reserve, homeowners' net worth is 44.5 times higher than renters' net worth. As of 2016, the median net worth for homeowners was $231,400 compared to renters' net worth, which was only $5,200. Also, a home that is paid in full is an asset that can be passed down to children, family members, and future generations, allowing them to have a headstart in building generational wealth.


House Hack 


As a homeowner, you have the freedom to use your home however you please. One way to make extra income by using your home is through house hacking. House hacking allows you to rent out a portion of your home to create additional income. The best part? Homeowners aren't required to count the rental income they receive from house hacking as taxable income. This means that any profits homeowners receive from renting out part of their homes are tax-free.


Recommended Read: Learn more about the financial benefits of house hacking here.


Tax Benefits


Homeowners are eligible for numerous tax benefits. 


One cost-effective tax benefit is the popular mortgage interest deduction. Anyone who purchased a home after December 15, 2017 is eligible to deduct any interest on the first $750,000 of the mortgage when filing their tax return.


Another tax benefit that homeowners can take advantage of is the exclusion of taxable income on a sale of a home. Homeowners may be eligible to exclude up to $250,000 of capital gains when they sell their homes. They must have used the home as their primary residence in 2 out of 5 years prior to the sale and not have claimed the same tax benefit for the sale of another home in the past two years.

Was this content helpful?
Comments (0)

Sign In to leave a comment.

Download the CapWay App

Access more features to your Money Account

  • Money Goals
  • Request Money
  • Categorize Spending
  • Money Talk

The CapWay, Inc Debit Visa Card is issued by Metropolitan Commercial Bank (Member FDIC) pursuant to a license from Visa U.S.A. Inc. “Metropolitan Commercial Bank” and “Metropolitan” are registered trademarks of Metropolitan Commercial Bank ©2014.

1. For Money Account holders with a negative balance, the CapWay debit card will go into freeze until funds are deposited to bring account back to current. See terms and conditions

2. Sending or receiving money from other CapWay account holders will be instant. Transfers from other accounts could take up to 48 hours, depending on the financial institution.

3. Early access to funds requires direct deposit. Early payment is not guaranteed and is dependent on the timing of payer's submission of deposits. We generally post such deposits on the day they are received which may be up to 2 days earlier than the payer's scheduled payment date.

4. Money Goals allows account holders to save money towards financial goals created within the CapWay platform. Funds can be transferred from your Money Account or saved through the rounding up of your transactions from purchases.

5. CapWay offers financial content through Learn Money free of charge, but may include advertisements through affiliates. Phunds, CapWay's literacy program and session, is paid content or co-branded content.

© 2019-2024 CapWay Inc. All Rights Reserved.