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The Best Investment
There are a number of reasons why purchasing a home is one of the best investments that you can make. For instance, as a general rule, most homes appreciate at a rate of 4-5% per year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region. This may not seem like much when compared to stocks, which can appreciate at much greater rates, but take a second look.
Presumably, if you bought a $200,000 house, you did not pay cash for the home. You got a mortgage, too. Suppose you put as much as twenty percent down – that would be an investment of $40,000. At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $40,000. Your annual "return on investment" would be a whopping twenty-five percent.
Of course, you are making mortgage paymentsand paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase.
Your rate of return when buying a home is higher than most any other investment you could make.
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