Your home – your investment |

Your home – your investment

Daily Staff Writer

Welcome Home!BY THETEAM@ELICH.COMOwning a home offers many benefits including the accumulation of home equity, tax advantages, security and pride in ownership. Real estate is considered one of the best investments a person can make.As a general rule, homes appreciate about 5 percent a year. That figure will vary from year to year, neighborhood to neighborhood and region to region. There are no guarantees, and drastic changes in the economy can affect real estate values. Over the long haul, most property appreciates in value. U.S. Treasury Bonds currently earn just over 6 percent and are considered the safest investment; however a median priced, single-family home in Colorado appreciated 10.4 percent in 2004 as compared to 2003.Owning a home forces you to save money. As your home appreciates in value, you’re essentially investing the value of your home at the rate of appreciation. At an appreciation rate of 5 percent annually, a $200,000 home would increase in value $10,000 during the first year. If your down payment on the home was $40,000, your annual “return on investment” would be 25 percent. Additionally, a portion of your payment goes toward the principal loan balance each month. In the early years of the mortgage, this does not amount to much money. However, as you pay down the principal, the equity in your home increases. If you sell the home, you recover that equity after paying off the balance of the loan.The government actually helps subsidize your purchase of a home through tax incentives. All of the interest you pay on your home mortgage in a given year on your primary residence can be deducted from your gross income to reduce your taxable income. Property taxes are also deductible. Owning your own home can help you manage your monthly financial obligations. When you rent a place to live, you can expect your rent to increase regularly. If you get a fixed rate mortgage when you buy a home, your payment will be the same each month for up to 30 years.Information for this column was found on the Colorado Association of Realtors website at, where you can find lots of valuable and interesting information about home ownership. WELCOME HOME! is compiled each week by the TheTeam@ELICH.COM. Butch Elich has been helping customers with their real estate needs in Summit County for over 20 years. His team includes assistant Claire Albers and associate broker Paula Parker. Find the ELICH.COM Team at RE/MAX Properties of the Summit in Frisco. They can be reached at (800) 806-9518 or at

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