Real estate is a very good investment if you’re willing to wait for the value of your property to increase over time. In this article, we’ve mentioned 5 reasons why buying a home is an awesome idea. But before we move ahead we would suggest you check these Homes for sale in Coronado in case you are looking for the best options in Coronado.
1. Renting is More Expensive
History shows that real estate is consistently tax-advantaged, meaning that owning is much more affordable than renting. Since mortgage interest, taxes on state and local property, and closing costs are all deducted, it is more affordable to generate monthly payments towards a mortgage than to monthly rent.
2. Practical Loans Exist
With the right loan, buying a home is very practical. Most new homeowners decide on a fixed-rate 30-year mortgage, even if their financial situation might benefit from an alternative arrangement. There are other fixed payment options that are considerably more accommodating to low and moderate incomes. One example is HUD’s “dollar homes,” where families can purchase foreclosed homes at a discounted rate. Another option is a first-time VA loan, where a mortgage loan of zero down is executed by private lenders and the Department of Veterans Affairs. If the borrower meets all the criteria, they can purchase a home as their main residence. The best part is that not all the criteria listed by the VA are necessary in order to qualify, and VA home loan rates can be competitive.
3. Your Career Might Help Your Purchase
There are also options for essential workers like teachers and firefighters through the Good Neighbor Next Door program. Homes are discounted by fifty percent off the asking price, so long as members reside, solely, on the single-family property for 3 years. There are even workarounds for those who can afford higher monthly payments. It’s possible to take on a 15-year fixed loan, as long as the homeowners have the income. Rates are still fairly low from a historical perspective.
4. Location is Key
If you choose to buy a home in a good location, and ideally the best possible location affordable to you, you will benefit from the net costs of homeownership compared to the renting net cost. Keep in mind that affordability means different things to different people. Santa Monica, which is easily one of the most expensive real estate markets in the US, still offers many free things to do and is fairly walkable. You may want to consider what it is you desire most out of your new home. Is it space? Access to the outdoors? Privacy? Maybe you want to live near top destinations. It’s up to you to decide what is and is not affordable by your own standards.
5. Protection From Inflation
Another reason to buy a home is to prevent future inflation. As you earn capital appreciation through generating a secure percentage of returns each year (this usually rests around 13% to 15%), you will protect yourself from inflation, given that housing prices change with inflation. The idea of seeing a home as an investment does not mean you have to overspend. You just need to make sure that you’re differentiating between buying for want or for need.
There are many reasons why buying a home is a good investment. If you get stuck on the idea of whether or not your home will appreciate, you’ll miss out on all the other components of owning a home. Raise in home value and inflation are mostly out of your hands, so instead, focused on preserving the value your home already has. Take care of your property and don’t sell without a clear plan and direction.