There is something to be said for renting. Actually, there is quite a lot to be said for it. There is so much to be said for it, in fact, one wonders why anyone would ever want to become a home owner in the first place. Homeownership is the single most recognizable aspect of what we call the American dream.
Without a doubt, there are certainly some benefits of owning vs. renting. When owning, one can do any internal home improvement project one wishes. External projects are possible. But some require a permit. Owning a home is beneficial for credit, auto insurance, and anything else where status and credibility are considerations. Owning a home can also be a valuable investment that can pay off big later in life. So if you think you’re ready to become a homeowner, here are a few things you might want to consider:
How to Turn the Purchase into an Investment
Buying a home can be a great investment. But it is not automatically a great investment. There are things you have to do to insure a good return on your investment. The first thing is to make sure you are buying a property that will retain its value. There are many declining neighborhoods that may look nice enough at first glance. But further inspection shows a lot of For Sale, and worse, For Rent signs. Those signs are indicators of declining property values. You can loose your shirt buying the wrong home in the wrong part of town.
You will want to invest in the right kinds of home improvements. Some of them actually decrease property value. Swimming pools are a good example of something that can actually lose you money when it is time to sell.
You will also want to be aware of options beyond selling the family home. One of the most popular methods of extracting value from a home is the reverse mortgage. You can use a reverse mortgage calculator to determine the amount of the home finance assistance you need.
The thing to remember is that a home is not an automatically good investment. But it can be made into a good investment with a little planning and elbow grease.
Are You the Do-it-Yourself Type?
It has been said of swimming pools that they are big holes in the ground where you pour money. The truth is, that sentiment could be used for everything related to home ownership. A home is a series of expensive, unfinished projects. No amount of money, time, or energy will ever see all the little things taken care of.
The question is how you plan to deal with that challenge. Are you the do-it-yourself type? or do you plan to deal with all home improvement projects by picking up the phone and calling in a professional? Both strategies can be rather costly. Doing it yourself requires a bigger financial outlay than you expect, regardless of the project. It will also cost you in property value when it is time to sell. No one wants to buy a house full of DYI projects that you should have never done yourself.
Still, hiring out everything is impractical for all but the 1%. You are going to have to have a strategy that involves both savings, and educating yourself to become proficient at home improvement tasks. If you do not plan for this aspect of home ownership, you could end up greatly disappointed.
Have You Considered the Alternative?
As has already been established, there is nothing wrong with owning a home. But there is also nothing wrong with renting an apartment. Home ownership does not make you a better person than anyone else. It does not make you wealthier. It does not make you smarter or more successful. Just as there are good reasons not to own a car, there are reasons not to own a house. Don’t dismiss the alternatives. Examine them carefully. Make an informed, rather than an emotional decision.