Property Grunt

Wednesday, December 08, 2004

What is an investment?

Buying your home is a great investment.

We hear that all the time. But what exactly is an investment?

According to Investopedia

An asset or item with value that is purchased for income or capital appreciation.

Is your home an investment?

According to Investopedia. No

Investment Real Estate

Real estate that generates income.

So if your own home does not generate income it does fit in the category as a real estate investment. Does that mean there are no benefits from owning a home?
Absolutely not!

The biggest benefits of home ownership are the tax breaks.

According to CNN Money

The Internal Revenue Service lets homeowners deduct their mortgage interest, property taxes and some other expenses of home ownership.

David Block states

"The tax breaks are significant," said David Block, a licensed tax preparer with Tax Masters Financial Services in New York. "The government is subsidizing your mortgage and property taxes."

Although your home is not generating income it’s saving you income as a tax break.