How Purchasing a Home is a Top Investment

Real estate is frequently a hot topic in the world of investing. We've repeatedly seen real estate top the charts as the most popular choice for investing here in America, and rightfully so.

Zillow recently corroborated these findings, as they outlined how buying a home becomes a valuable investment in every sense of the word. Here is how you can make a home purchase a valuable part of your investment portfolio, and add value to your wealth footprint.

Saving the money you earn

The majority of Americans have a difficult time with this category. It appears easier, on a surface level, to pay rent fees every month without worrying about scraping together money for a down payment.

Unfortunately, this also means the majority of Americans are not benefiting from the investment potential of that money, which is lost to their landlord.

Purchasing a home, however, creates a forced savings plan. Instead of shipping off funds to pay rent, the money you set aside month to month for your mortgage payment goes becomes invested in your property as you gradually pay off the property.

Comfortable retirement options expand

According to Zillow, individuals who are able to retire with a paid-off home are more likely to have a comfortable retirement than those who are still paying rent or mortgage payments after retirement.

Financial effort placed into your retirement plan will, therefore, have a greater return if you have completely paid-off your property.

Investing in a good investment

It is important to note that just because buying a home is an investment, not every home is a good investment. Short-sale home ownership, fixer-uppers, condos in poorly run homeowners associations, and essentially any other properties that will be more expensive to own than rent are to be avoided.

Anticipating time frame

Additionally, it is important to assess your ownership time frame. Of course, investments are best optimized with commitment of time - and the larger amount of time (and thereby finances) you are able to invest in any one portfolio, the larger a benefit you will experience from your investment.

Does this mean living in one property for the rest of your life? Of course this would be the most ideal investment situation, but it is not always a feasible option. You can always consider renting out an old property, keeping in mind the drawbacks, or upgrading to a home that may be a better investment anyway.

Attainable and sustainable mortgage

It is also important to make sure when you invest in a home that your purchase comes with a mortgage payment that you can comfortably afford based on your income level and pre-existing financial obligations. Certainly our current mortgage environment is an historically incredible opportunity for borrowing money. 

Questions on buying a home? Looking to invest? Unsure about your next step? Don't hesitate to send us an email or give us a call. We'd be happy to help!

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