Is Buying A Home A Sound Investment?
Posted by
eli
on 12/27/09• Categorized as Real Estate
A reader asks: “Is buying a house a good investment? If I buy a house my money will just sleep and it does not make any more money, compared to investing it in business. What do you think”
image from www.aaci.org.il/articlenav.php?id=138
I meet people who have the same thinking as the reader, and they have almost similar questions.
From a realtor’s point of view, however, I could say that buying a home is really a good investment. Actually, we buy a house because we intend to live in it for a long time or, to some, for a lifetime.
But a house is also a good investment for its own sake. I’ll enumerate here the reasons why, to help you decide for yourself:
1. Your house appreciate its value over time, so it is anti-inflation. Real estate property, like a house and lot, increase in value, for example, every year. That represents savings for you.
2. You can buy your house with little investment using leverage funds, like borrowing money through a mortgage, and it adds up to your assets. Because of your house (actually real estate since you also own the lot where your house stands) appreciates its value, your investment will increase and you earn passive income as a result.
3. Savings. Owning your own home is a way to save money, e.g. compared when you are just renting the property.
4. Peace of Mind And Status. Since you own a house, you will have peace of mind because no matter what happens, no landlord will evict you out. Furthermore, our society as a whole consider owning a home as a status symbol, as differentiated from being a renter. Homeowners see their homes as proof of success and stability, a reward for their hardwork.
There are many other reasons why buying a home is a good investment, but to me the foregoing four are enough to convince me that it is.
Thanks for this article. It makes me rethink my opinion and I’m convinced now that buying a house is a good investment, now or for the children.
Good tips. I agree with you. A house is really a good investment. If i don’t want to live in it anymore and move to another city, I’ll have it rented so that the rental payment I’ll use to lease the house where I moved it.
Besides, a house is something that thieves cannot steal.
IMO house is a good investment especially in growing area.
Thanks
My thought about this is that, whether it is good for or not depends on the persons’ plans and current financial situation. I agree to the fact that real-estates are “anti-inflation” but it is not “liquid”. Many people who put their most money on investments like these finds it difficult to sell it as quickly as they want. In emergency cases where you need fast cash, you may be forced to sell it way below its true value.
But if you really use it and you have enough liquid assets, then it can be a good option. My point is that “real estate” as a good investment depends on the person himself.