Why Your Home Isn’t A Great Investment Anymore


Traditionally, buying a home is considered a great investment. If you agree to this widely accepted idea, then you might be in for some surprise as the recent trends in real estate suggest otherwise.

Buying a Home is not a Safe Investment Recently

According to HumbleDollar.com’s Jonathan Clements, homes aren’t considered as a great investment anymore because of the slow price appreciation of houses. Appreciation rate has been so slow in the past few years; in fact, it is just 1% faster than inflation.

Also, recent sales report show that some homeowners have sold their homes lesser than its original price. Besides selling low, homeowners have to factor in things such as property taxes, maintenance fees, and insurance cost. All these factors deduct a huge chunk out of the sale you are receiving.

Home Rental is a Good Option

Buying a property might turn for the better if you consider converting into a rental home. This way, you will actually have recurring income out of it. But before you do that, make sure that what you are buying is priced correctly. If possible, you should aim for the cheapest you can buy. Consider also the miscellaneous expenses that need to be taken cared of.

If you have a home already and want to earn some extra cash, you can look into having it rented. For this purpose, some homeowners renovate a part of their home that they don’t particularly use regularly. Areas of the house such as the basement or an extra floor above are great for a rental space. One good thing about his is that the extra revenue can help in paying for the mortgage of the house.

To Buy a home or Just Rent One?

Just because homes aren’t really a great investment nowadays, it doesn’t mean that you should not buy one. If you’re planning to live in a home for good (and even pass it to your kids when they grow up), buying your own property is still the best decision you can make.

One advantage of owning a property is that you won’t have to spend monthly on rent. Your rent expense can actually be allotted for the mortgage. Real estate experts also believe that this slow down in house price appreciation won’t stay for long. They are still hopeful that the prices would again increase drastically, especially over the long term.