Being 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 will depend on the economic trends, neighborhood, and region. Sometimes it goes down, but it always comes back up. Stocks may appreciate more at times in investment terms but treasury bills, bonds, or other safe investment will earn a similar return over time to that of a home.
Most of your costs are subsidized because your mortgage and property taxes are tax deductible. Your appreciation will be based on the total amount that you paid for the house and your down payment can earn as much as 25% based on the amount you put down. This does not include your mortgage payments and other expenses, but it does represent a good return on investment by most standards. As you pay off your loan, that return investment will grow over time until eventually the loan is paid off.
Before you rush out and buy a home, there are times when you should not consider investing in property. Resulting in you losing out on the appreciation and return on your investment is buying a home for the wrong reasons or at the wrong time and end up selling it too quickly. Your profit may not even cover the cost and commissions you will be liable for if you sell too soon.
Moving into a new region, country, or area doesn't mean you should rush into buying a new home. Instead, rent for a while so you can familiarise yourself with different suburbs, the amenities you want to live close to, and the real estate market in the area. Waiting a while before buying will also help you settle into your new job and gain some financial stability in the area - a good reputation with the local bank can help you get a mortgage when you are ready to buy a property.
It is best to wait until your have some kind of history with a financial situation or have a 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.
Buying a home can be a good, stable long-term investment. The returns can be considerable but it's not a decision to be taken lightly. Buying at the right time, both in terms of the real estate market and in terms of your personal circumstances, will help you reap the benefits and make a good profit when it comes time to sell.
Each year, homes generally appreciate by about 5%. This will depend on the economic trends, neighborhood, and region. Sometimes it goes down, but it always comes back up. Stocks may appreciate more at times in investment terms but treasury bills, bonds, or other safe investment will earn a similar return over time to that of a home.
Most of your costs are subsidized because your mortgage and property taxes are tax deductible. Your appreciation will be based on the total amount that you paid for the house and your down payment can earn as much as 25% based on the amount you put down. This does not include your mortgage payments and other expenses, but it does represent a good return on investment by most standards. As you pay off your loan, that return investment will grow over time until eventually the loan is paid off.
Before you rush out and buy a home, there are times when you should not consider investing in property. Resulting in you losing out on the appreciation and return on your investment is buying a home for the wrong reasons or at the wrong time and end up selling it too quickly. Your profit may not even cover the cost and commissions you will be liable for if you sell too soon.
Moving into a new region, country, or area doesn't mean you should rush into buying a new home. Instead, rent for a while so you can familiarise yourself with different suburbs, the amenities you want to live close to, and the real estate market in the area. Waiting a while before buying will also help you settle into your new job and gain some financial stability in the area - a good reputation with the local bank can help you get a mortgage when you are ready to buy a property.
It is best to wait until your have some kind of history with a financial situation or have a 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.
Buying a home can be a good, stable long-term investment. The returns can be considerable but it's not a decision to be taken lightly. Buying at the right time, both in terms of the real estate market and in terms of your personal circumstances, will help you reap the benefits and make a good profit when it comes time to sell.
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