You have to live somewhere, and unless you are very lucky and get given a place to live for free, the chances are you will either have to pay rent or pay off a mortgage.

We believe owning a property and paying off your mortgage is better in the long-term than paying rent to pay off someone else’s asset. All too often we hear the phrase “but I live in my house so it can’t be an asset”, however it is.

Here are some of the reasons why.

You’ll own something

Providing you keep up with the mortgage payments, you will own the property at the end of the loan period. Once the loan period is finished, money you had been paying into the mortgage is then free to be spent on other things. Furthermore, should you need to move after you’ve paid off the loan, you can either sell your house and have money in your back pocket, or rent it out and have an income.

Selling the property

There will come a point in time when you have to sell the property. You could be downsizing, upsizing, or simply moving interstate. There are lots of reasons why people need to move.

Property usually increases in value over a number of years, so in most cases you will be able to sell your home for more than you paid for it. You have just made some money.

But here’s the great bit. The Australian Tax Office says “Generally, you don’t pay capital gains tax if you sell the home you live in (under the main residence exemption)”. This means all the profit from the sale of the house, minus selling expenses, will go straight into your pocket.

And remember for every renovation and improvement you make on the property, you will be increasing its value.

For those who like a renovation project, buying a run-down property, living in it and improving it, then later selling it, is how they make money (this is provided the profit is more than the cost of the renovations). Depending on their financial goals, they may use that money to buy another property to live in, renovate and sell, or buy the house of their dreams.

However, you don’t have to be a DIY expert to make a good profit on your home. Savvy homebuyers are now looking at buying and living in up and coming locations. They are hoping a property there may increase in value more than property in other locations.

Borrowing against the equity

As house prices rise and you continue paying off a mortgage, you could find yourself in a position where you can borrow against the equity in your house. This may be to purchase another property, or simply to have a bit of extra cash for a holiday or car. Some people have increased their mortgage to pay off credit card debts or other loans as the interest on a mortgage is often less than the interest on the credit card or loan.

Talk to a financial specialist to see how it can work for you.

While you do have to wait a few years to reap the rewards of owning your own home, there’s ways in which you can make it work for you.

If you’re thinking of selling your property, or even just want an appraisal, come and talk to us. We are one of Newcastle’s longest established real estate offices and our innovative team is constantly achieving great results for our clients.

Drop into the Cardiff office or give us a call on 02 4954 8833. Or send us an email to: – we’d love to hear from you.

And don’t forget to check out our Facebook page for handy tips on selling your property or what to look for when buying a property.