Are you thinking about your financial future as a new year kicks off? When people think of making investments, they often think of playing the stock market, or potentially growing their nest egg with other bank products. However, investing doesn’t just belong on Wall Street, and it doesn’t only happen at your neighborhood bank, or with your financial investor, it starts with your home! Your home is an investment – many people who have never been exposed to real estate investing don’t think about how buying their first home, bouncing back from a short sale or foreclosure, or adding a rental home to their portfolio can contribute to a stronger financial position in the future.
When you buy a house, you are investing in your future. As you pay your mortgage, you are developing equity. When you own your house in full, it becomes a source of cash once you sell it, or you may choose to borrow against it to consolidate other debts at a lower interest rate. Over time, your house can appreciate in value so when you do sell it, you will earn a profit over what you paid when you purchased the home.
Working with an experienced agent means you have the advantage when it comes to maximizing future potential equity and profit. While there is never a guarantee, a seasoned Realtor can help you identify homes with attractive and hard-to-find features that may make a home more valuable in the future. He or she may also help you to find homes to choose from, which with a little TLC, may appreciate faster than other average homes in your area. Additionally, a great agent will be resource for which kinds of properties to avoid if equity and profit are a priority for you.
As time goes on, it is also possible to create an investment portfolio of different properties. As an investor, you can purchase houses with the intention of renting them. Hopefully you’ll be “cash flow positive”, meaning that you break even or make even a little more than the monthly mortgage when the house is rented out to tenants. There is never a guarantee that a property will cash flow, especially if you have to invest in maintenance, or when there are periods of the house sitting vacant – be sure you are working with a trusted Realtor who has an extensive track record in successful property management. He or she will help screen and place tenants in the home, act as a point of contact between you and the renters and generally maintain the property and protect you financially and legally.
Finally, your home is an investment in you and your family. As you and your family grow, your home becomes a meaningful place full of memories. The happiness and sense of satisfaction that come with homeownership are second to none. This type of investment cannot be monetized, but it is priceless.
Have questions? Contact us today and connect with a Realtor who can guide you through the process of buying a home that is likely to grow in value.