For many, buying a new home is a good investment. They believe this because the money they pay monthly for housing goes to a home they own. Paying a mortgage is far better than paying out cash to a landlord with no long-term benefits. On the other hand, many believe that owning a home can come with problems, such as repairs, damages, and maintenance.
So, is a new home a good investment? That is something for you to decide. Here are some things to consider when determining if buying a home is a good investment for you.
Determining if buying a new home is a good investment is a personal decision. Some feel it is, while others don't want to deal with what comes with homeownership. There are many things to consider when trying to answer this question for yourself.
A good investment is something that will make you money. Can buying a new home do that? A home can only do this when you sell it down the road or turn it into a rental property. In both of these situations, buying a home can make you money and be a good investment. However, as a homeowner, waiting to sell the house or renting it can cost money — mortgage, insurance, taxes, and maintenance. Before determining if it is an excellent investment, you must calculate the amount of money you spend on the home against the potential income you intend to receive from it.
Owning a home can bring you so much long-term value, which you cannot obtain renting. Throughout homeownership, you will be investing a lot of money into the property. As long as the home's value goes up, you keep it maintained and update it along the way; when you sell the house, you get the money you invested back and additional money.
However, if you are looking to make fast money from your investment, buying a home might not be the best option. The longer you wait for the market to improve, the greater your chances of selling the home for more than the cost you paid to buy it. If you want to sell it within a few years of buying it, the market may not have improved enough for you to break even or break money. Short-term goals in home buying generally are not a good investment unless you intend to flip the home.
Upfront, buying a new home can be a better investment than buying a used home. New homes are fresh and need minor repairs or changes in the first several years. Additionally, new homes come with warranties covering most items that stop working in the early years of homeownership. Used homes may cost less than a new home upfront, but that could be because many repairs and updates need completing. The repairs needed may cost more than buying a new home and, if continued repairs are required, could force you to spend more long-term, affecting your total investment value.
Is buying a new home a good investment? The answer is — that is up to you. Determine your goals and how purchasing a home can help offer you financial stability as an investment. If you plan to make money out of it and don't mind waiting, the answer might be yes, it is a good investment.
Are you looking to buy a new home as a long-term investment and need some repairs? Experts In Your Home can help with building a new home, home remodeling, and any other type of repair required. Click here to learn more about the services available and request a quote.