The first step to creating generational wealth is owning your primary residence. Have you ever thought about how much you spend on rent over time? Chances are, it’s more than you realize. Instead of paying rent, that same amount could go toward owning your own home—building equity in a property you own and potentially benefiting from tax advantages tied to homeownership.

When you rent, your monthly payments go to the landlord with no return for you. However, when you own your home, part of your monthly mortgage payment goes toward reducing the principal on your loan, building equity with every payment. Over time, this equity contributes directly to your personal wealth, while rent payments offer no such benefit. Additionally, historical trends have shown that home values tend to appreciate at an average rate of around 4% per year. Homeowners benefit from this increase in property value, while renters do not gain from this potential growth.

Owning your primary residence offers additional benefits, such as:

Tax Benefits:
Including deductions for mortgage interest and property taxes.

Inflation Protection:
Real estate, as a tangible asset, often acts as a hedge against inflation. As living costs rise, property values typically increase, helping to protect against the diminishing effects of inflation.

Real estate offers the opportunity to be passed down from one generation to the next, enabling wealth to grow over time. With thoughtful estate planning, families can ensure a seamless transfer of real estate assets, creating a strong financial foundation for future generations.

 

For personalized guidance, please consult with a qualified tax advisor or Certified Public Accountant (CPA).