Everyone needs a home. Should you rent a home, or should you invest and buy your own? It may seem like a simple question, but the answer is different for everyone.
Until 2008, many people considered real estate to be a bulletproof investment. Houses always appreciate, right? Today, we know that is not the case. There are potential risks, but there are also many advantages. To find out if home ownership is for you, there are a few things you should consider.
What a Perfect Investment Looks Like
In a perfect world, what would home ownership look like? The most important thing is your quality of life. Your home should meet all of your needs,
and you should enjoy living there. This includes both the features of the home, as well as the local amenities. When it comes time to sell, you should earn a tidy profit and qualify for it to be tax-free. This is what renting vs buying is all about.
The Financial Differences between Renting and Owning
In the short term, renting appears to be the cheapest option. You don’t have to worry about maintenance, insurance, property tax, or a hefty down payment. If it costs $600 to rent and $1000 to own, you might think that owning is more expensive. For some people, the cheaper option is better.
Renting can save you money in the short term, but there are a few things you’ll miss out on. Choosing ownership gives you a mortgage interest tax deduction, and the profits from the sale of a home that appreciated are very likely to be tax free. You can rent the same place for 20 years and never get a cent back. Putting that same money towards a mortgage could have bought you a house. Why not buy now? The past is gone, the future is unknown. There is no better time than now.
Stretch Your Dollar With The Right House
Haven’t found your dream home? In some cases, it’s worthwhile to buy a home with less appeal. When a home is unattractive, dated, or simply in need of a coat of paint, you’ll be able to purchase it for less than the appraised value. You can invest in some renovations, improving the chances that you’ll profit when selling.
Not much of a handyman? Buy a home in an up and coming area? Neighborhoods going through the gentrification process, or property just outside of a quickly growing city stand a much higher chance of appreciating.
Timing is Everything
If you want a real estate purchase to be profitable, timing is one of the most important factors. You’ll want to buy a home when prices are low, and sell when they’re high.
How much is a home worth? It’s not the number on the appraisal report. It might not even be the price it’s listed for. Homes are worth what they sell for. Although nobody can predict what the housing market will do, your real estate agent understands the local market and can give you the advice you need. They’ll be able to help you buy at the right time, and can help you time the sale as well.
Every Situation is Different
People buy real estate for various reasons. Some want to get the home of their dreams, while others want to see a return on their investment. If you can clearly define your needs, a real estate agent can help you determine if there is a home that will help you reach your objectives. Whether you want to make an immediate return on the investment or a long-term return, we can help you achieve these goals. Simply call or text 530.400.0496 to get your thoughts focused and finalized. This could be the best call you have ever made.