How Homeownership (Factory-Built or Site-Built) is the Path to Financial Freedom
AMERICA STANDS FOR FREEDOM — FREEDOM THAT LETS YOU REACH FOR THE STARS AND CREATE THE LIFE YOU’VE ALWAYS DREAMED OF.
If there’s anything history has taught us, it’s that homeownership is one of the best ways to build wealth and secure your financial future. In fact, it’s often cited as a major component of the American dream.
A part of that freedom means having the financial stability you need to pursue your life goals, and the easier you secure financial freedom in life, the more opportunity you’ll have to make your dreams a reality.
Manufactured homes are a great option, especially for first-time investors who have a limited budget. Today’s high-quality manufactured home is built as well and often even better than a traditional site/built home. Manufactured homes are built in a factory setting under very intense control according to the HUD-Code, the only national building code for single-family residential homes.
A manufactured home or modular home is “everything a home should be” and meets all the criteria of homeownership, including quality of construction, appearance, energy efficiency, health, and safety, and will have a cost of about 50% less than a comparable home built on site.
A manufactured or modular home attached to real property is eligible in most situations for mortgage financing equal to a traditional site-built home.
FIVE MAJOR WAYS BEING A HOMEOWNER CAN HELP ACCOMPLISH FINANCIAL STABILITY
Homeownership can help create forced savings: Most of us aren’t very good at putting money aside each month, but every financial expert would agree that having a savings cushion is essential for financial freedom. For homeowners, a monthly mortgage payment can act as a forced saving. As you pay down your principal, you build equity, which helps to increase your net worth.
Homes usually appreciate in value: While there is no guarantee that the home you buy will appreciate, there’s a pretty good chance. According to the Federal Housing Finance Agency’s House Price Index, home values have appreciated an average of 3.6% each year since 1991. If you purchased a home for $100,000 in 1991, your home today could be around $275,000. In addition to the amount you have paid off on your mortgage during that time, this appreciation in value builds even more equity, therefore increasing your net worth.
A Home is a tax shelter: When you earn a profit from a property or investment (say the stock market), you normally have to pay capital gains tax. But if you make a profit when selling your home, that profit can’t be taxed (with some limitations), which keeps more money in your pocket. Owning a home also comes with other tax benefits, such as deductions on mortgage interest, mortgage insurance, and property taxes.**
**(NOTE): We are not a tax advisory firm. The information contained in this article is for information purposes only and may not reflect current year rules and regulations. Consult your tax advisor or the IRS for current year rules and regulations).
You can have a fixed, stable housing payment: Renters are susceptible to fluctuating rental prices, which have historically gone up each year. Mortgages, on the other hand, can be fixed, which provides a stable housing payment that won’t fluctuate over the life of your loan. This will allow you to keep your cost of living down and put more of your money towards savings, investments, or other avenues that can help you build wealth.
Homeowners have a greater net worth: According to the Federal Reserve’s Survey of Consumer Finances, homeowners have 44.5 times more net worth than renters. As of 2016, the median net worth of homeowners was $231,400. (A gain of 15% since 2013), compared to $5,200 (a loss of 5%) for renters. This comparison clearly shows the power of homeownership for building wealth.
Gaining financial freedom, homeownership (factory-built or site-built) is a no-brainer. Buying a home is one of the smartest things you can do to help you build wealth for the long term. A new manufactured home will be quicker, more affordable, require a less initial investment, lower monthly payment, and if comparably sited will appreciate in value equal to a new site-built home.