There are many people out there who are able to give out consistent advice regarding what you should be doing with your money, your life, and your future. When it comes to buying and selling properties, the fact is many people may think they know better than you. So, while you may receive some advice regarding buying a house or a piece of land, the key to remember is the reason why you are buying it in the first place.
Pay attention to these ideas so you can ensure your home serves a purpose and was not just bought because of someone else’s suggestions.
If you need a place to live and you don’t want to waste countless dollars paying off someone else’s mortgage via the form of rent, then perhaps it is the best option to go out and buy a place. When you are looking for any sort of property to make your own, the real key to remember is whether or not you will actually like it and want to live in it in the future.
On the one hand, you do have to remember there will be more hidden costs and general expenses associated with a given property that you own. You have to be prepared for unexpected expenses as well. On the other hand, as long as all of your costs combined are still relatively close to your rent, then you are getting the same overall value while also earning equity.
Aside from the purely financial intentions and motivations, a house you can actually live in and call your own does have a significant amount of benefits. These can be both personal and confidential such as with respect to having privacy or earning a sense of accomplishment. These can also be more general such as the fact that everyone believes one of the steps to adulthood is the ownership of a home. The point is when you need somewhere to live in, it’s not a bad idea to buy a place especially if you like it.
Long Term Responsibilities
While many renters will argue that the top reason for renting is general flexibility, the point to remember about renting is that you never get ahead. If you are thinking about picking up your feet and moving far away then it might make sense, but even then there are still ways that owning could be better.
The real key is to understand that when you are dealing with renting, you aren’t buying a product. You are paying for a service. It may accomplish the same things as the act of buying a building (a product), but it is still a service at the most basic of levels
The reason renting is considered a service and therefore the reason you can’t get ahead is because you have no ownership of anything. You are just a long-term guest but don’t have any skin in the game. You don’t own the walls, roof, ceiling, or even the parking space out front. Someone else maintains the place and even fixes things when they break down or need repair.
Even though it may take a homeowner a few decades to pay off a mortgage, the converse is when you have an apartment you never pay off a mortgage. You just keep resigning the lease and keep paying forever. This is not the best personal finance practice in every sense.
Potential Investment Opportunity
Looking at houses in general, anyone can discover they truly are a tremendous investment. This isn’t to say that everyone should jump headfirst into the real estate market and buy and sell solely based upon speculation or a “sure thing.”
However, there are reasons to love homes. If a home is built well then it serves a purpose. People will always need homes (at least for the foreseeable future). Historically, homes and housing have continued to appreciate at very comfortable margins, according to Michael Blue Jay.
These are all very powerful reasons, even if you are on the fence about investing in a property. If you have enough time on your side, houses are the one thing that consistently pay off. And, if you are able to get a potential house in even an average area, the chances that the home will appreciate and gain significant value over time will definitely be in your favor.
If you’re just getting started, it’s recommended that you invest in your local area. For example, if you are living in Kuala Lumpur, Malaysia, you should start your endeavor from KL and the surrounding area. To make things easier, you should use online property search tool to help you out. For example, you can search for the best property for sale in Malaysia with PropertyGuru instead of visiting your local real estate agents one by one.
While not everyone wants to be a landlord, the fact of the matter is there are enough people out there who either don’t want to own, don’t know how to own, or even can’t qualify to own. Those people all would like to rent out a unit in someone else’s house and are all more than happy to pay good money to take out a few rooms in your property in exchange for rent money each month.
According to Bank Rate, when you think about the potential income you can receive in exchange for allowing someone to live in your unit (even if it isn’t your primary residence), then you can imagine just why renting has become such a powerful thing for many.
The one thing to remember is that there are obviously risks within the landlord game. However, if you do your homework, construct a solid lease, and perform background checks on the potential tenants then you will be able to bring in a safe tenant and therefore be able to collect significant income all in exchange for having the unit in your name with the bank and being on the hook for the mortgage.
The Bottom Line…
At the end of the day, owning a house provides you with many options including some that aren’t even listed here. However, when you are considering the reasons to buy a building and why you would want to invest your time and effort into one, you just need to make sure it makes sense for you and not worry if the reasons are good enough for anyone else.
Cover photo credit: Pat Scullion / Flickr