Why A House Is Still A Solid Investment
To buy or not to buy? This question looms on every American during his or her lifetime. Buying a home is usually a big task since it requires at least some down payment, mortgage paperwork and substantial monthly payments for many years to come.
Renting vs Owning
Many Americans start thinking that renting a house or an apartment is cheaper and less frustrating. While this might be true today, such decisions may turn out to be fatal in the future. Spending about half of the income on rent is a step toward disaster. Rent goes up with time and sometimes it makes big jumps. Spending more than half of your salary on rent for the rest of your work life sounds dangerous when you think about retirement prospects.
Why do you want to throw your money into a bottomless pit? The dollars you pay for rent stay in some guy’s pocket and don’t bring you any benefits in the future. By investing in a home, you are making slightly larger payments but, in the end, you become a homeowner.
People under 40 rarely think about the retirement since it seems to be too far in the future. That is why choosing the lifelong rent option may seem appealing. Of course, it may make sense to some renters to pay less for rent and spend more on their current needs. However, as the time passes, they start to realize that a bottomless pit has taken too much of their money and hasn’t given anything in return.
Investing in a home is investing in your future. No matter how the politicians decide to deal with the benefits and retirement plans, you’ll always have a place to live in. If you don’t buy a home, you may end up in very sorry living conditions.
People, who are afraid of spending a large amount of money or applying for a mortgage, usually make excuses. The popular one is that they can’t afford their ideal house just yet. But Rome wasn’t built in a day too. If you can’t buy an ideal home just yet, buy at least something to make a start. When you find the home of your dreams, you can always sell whatever you purchased before. At least you’ll have something to sell.
In case you just can’t find a home you are ready to live in, even if for just a couple of years, invest in rental property.
Real Estate vs Stocks
When thinking about making an investment, many people choose between real estate and stocks. Real estate is usually the perfect idea for the lower and middle class since it seems natural. Their parents and grandparents have discussed the dream of a good home for years.
When you invest in a home, you can see what you are getting. You can touch it, feel it, take pictures, etc. This is an important psychological factor for many investors.
Compared to the stocks, real estate is more reliable since it’s harder to defraud an owner, who can inspect the property, check the tenants, do the repairs, etc. When it comes to stocks, you have to trust the management.
In addition, real estate investments can protect against the loss of thje dollar’s purchasing power.
Today, you hear many opinions about real estate investments. Some experts believe that such investment technique is costly, outdated, and useless. However, if you take a closer look at the real estate investment picture, you’ll realize that, in most cases, it’s worth your while.