Is Purchasing a Home Actually a Good Investment
If you are currently paying rent and have a tiny bit of resentment every time you make that rent payment because it is a significant sum of money that is going to benefit another person’s investment portfolio you are not alone. But is purchasing a home really the right choice for you right now? Is it a really good use of your money? Is buying a home a good investment?
A recent survey conducted by finance expert Ramit Sethi showed that 29% of people who took the survey are tired of hearing that purchasing a home is the best use of your money. Some even believe this advice to be toxic. There are some aspects of homeownership that some people would rather not deal with and prefer to rent. But who has the better outlook?
Is a home an actual investment or is it just a large life expense?
The answer to this question really depends upon your personal everyday life and your mindset. The reality could be that both answers are correct, it really depends on your personal life preferences.
To be completely neutral on both fronts and take the most realistic approach a home could be considered a hybrid of a large expense as well as a great investment. A home is an expense in the fact that you will be spending a large amount of your income paying the mortgage maintaining the property and paying the other costs of staying in the home such as property taxes, insurance, and all utilities.
But at the same time, these expenses of homeownership also pale in comparison to the potential gain in property value that will benefit your overall wealth and financial portfolio with time. There is much equity to be held in the property value as the years go on and the value of your home increases. It is found that many homeowners who have been in their home for a few years are finding themselves what is called equity rich. This is where about 50% of the property value or more lies in home equity instead of being tied up in the amount owed on the property.
So, should you purchase a home? Is it actually beneficial?
The answer to this question really boils down to your personal preferences. When it comes to buying a home, it is always best to do as much homework as possible and to ultimately go with your gut feeling after doing all of that homework.
For you personally you’ve got to weigh all of the aspects of renting versus owning a home and decide truly what you feel would be more beneficial for you and anybody else involved in the home purchase transaction.
As mentioned above the survey resulted in a significant amount of people feeling that aspects of homeownership just aren’t for them. Many of these things can include the time and cost it requires to keep a home up all on your own, whereas, if you were renting these items are the responsibility of the landlord. If you are not particularly handy or good with your own repairs this will require spending a significant amount more on a professional to come and make these repairs for you. Then there is also the time invested in landscaping and other aspects of just keeping the home nice so that it does retain its full potential value. Some people prefer to merely hand over a rent payment (that could increase at any time) and know that that is all they are responsible for in the way of housing costs.
On the other hand, there are many renters who would prefer to get out from under the landlord’s thumb in a sense. They would like the freedom to make more decisions with how they live their life in their house on a daily basis and how they choose to maintain, or not maintain, their own home. Instead of being under the microscope of the landlord making sure that the tenant is not doing anything they do not want to be done to the property.
For more information on the current real estate market in St. George and available homes in Saint George and surrounding areas please contact us anytime.
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