Tips To Help You Decide Whether You Should Buy A Home
Tired of paying rent to pay off someone’s mortgage, tired of interfering landlords, or just want the security of owning their own home is what most people will say when asked why they are buying a home. Not many mention the investment side of real estate, yet this should be your main reason for purchasing a property.
Each year, homes generally appreciate by about 5%. This varies depending on the neighborhood, region and of course the economic trends. It may go down, but it always comes up again. Earning a similar return over time to that of a home is
a safe investment such as treasury bills or bonds and in investment terms, stocks may appreciate more at times.
Because your mortgage and property taxes are tax deductible, most of your costs are subsidized. Based on the amount you put down, your down payment can earn as much as 25% but keep in mind that your appreciation will be based on the amount you paid for your house. This does not include your mortgage payments and other expenses, but it does represent a good return on investment by most standards. Over time, that return on investment grows as you pay off your loan until eventually the loan is paid off.
Before rushing out and buying a home, bear in mind that sometimes, investing in a property is not a good idea. You do not want to buy a home for the wrong reasons, or at the wrong time and end up having to sell it too quickly, as that will result in you losing out on the appreciation and return on your investment described above. Selling too soon could mean the cost and commissions you will be liable for may be not covered by your profit.
Moving into a new region, country, or area doesn’t mean you should rush into buying a new home. For a while, try renting so that you can be more familiar with the amenities you want to live close by, the real estate market in the area, and the different suburbs. A good reputation with the local bank can help you get a mortgage when you are ready to buy a property so wait a while before you buy because this will help you settle into your new job and gain some financial stability in your area.
It is best to wait until your have some kind of history with a financial situation or have good credit before you buy a home and this is especially true if you’re new to the job market, a college graduate, or entering the work force for the first time. If your job is not secure, for example if your company has announced plans to restructure, or you are expecting a promotion that may involve relocating, you should not look at investing in property until the situation has stabilized.
A good, stable long-term investment is buying a home. The returns can be considerable but it’s not a decision to be taken lightly. You need to buy at the right time, both in terms of the real estate market and your personal circumstances, because this will be helpful in reaping the benefits and when it’s time to sell, you can make a good profit.