40 Practical Reasons To Stop Renting

When you own a home, you can begin to build equity. Credit: Shutterstock

4. Building Equity

You have probably heard the term “equity” thrown around on HGTV’s Fixer Upper, but do you really know what it means? It is when your home is worth more than what you owe on the property. So if you were to sell it, you would actually get money back. For example, let’s say you only spent $100,000 buying a house and fixing it up, but you have the ability to sell it for $150,000. This means that the house has $50,000 of equity.

As time goes on, your home equity should increase. Credit: Shutterstock

Usually, you can achieve building equity when you buy a property that is a good “fixer-upper”. Or, you maybe got a really good deal on a home, and were able to sell it once the value appreciated. This is a great way to grow your money and overall net worth. Obviously, you would never be able to do something like this if you were renting, since your rent money is going to pay off your landlord’s mortgage.