Most homeowners understand that when they purchase a home they are making an investment. The days of giving money away to the landlord are over and, should you choose to move in the future, you will be getting back the money you’ve invested. There are some that purchase a home for the exclusive purpose of investing. The question for these buyers is, “Is buying a home a good investment?” Experienced Lemont IL real estate agent Chris Budz has a few thoughts on the subject.
An investment is defined as the act of putting money or capital to use in order to gain profitable returns, as interest, income, or appreciation in value. Given this definition, buying a house is certainly an investment. There are a number of ways that property can result in a return. For the most part, the longer you own the home the better of an investment it will be. Short-term ownership can provide a return if done right, however, it can also be more trouble than profit. If the area is desirable to live in and the house needs work that you can put into it and reap a profit, then this may be a good option. Just buying to sell without any increase in value often is not worth the time.
Types of Return
A home can provide return is several ways. In contrast to rent, once you pay off your home you no longer need to pay out money for your dwelling. This means saving thousands each month. If you hold on to the home for years it will appreciate. This means that you will be able to sell it for more than you bought it for, thus making money. In some cases, you can deduct expenses related to your home on your taxes. This means that you will save money each year when tax time comes around.
One challenge that buyers who seek to own a home as an investment will face is choosing the area. Remember that the return comes years down the road. Therefore it is important to choose a home in a location that will hold its value. If you choose a home in an area that is declining you may find that it will not appreciate much in years to come. Be sure to check the status of local schools and crime rates as well. A qualified real estate agent will be able to give you insights into a community. Another challenge is maintenance. The home and property needs to be maintained well as the years go on. Again the goal is to retain the value of the house. This is a significant commitment and should be considered before buying.
For more help buying your next home contact Lemont IL Realtor Chris Budz.