Is There a Need For You to Purchase a Home for Yourself or as an Investment?
If you are currently in a situation wherein you are confused if you should buy a house for yourself or rent it out to other people, then you must decide wisely. Here are some of the things you need to keep in mind in order to make the best decision.
Overrating the value of real estate as a form of investment
Truly, real estate is one of the most non controversial type of investment at present. Yet, there are still other investments that are consistent and stable in terms of earning cash even with the advantages and disadvantages of the housing market. But is it really doubtfulness that you are going to earn? Is purchasing a home enough to make money as long as you have patience? I know you know for yourself that the definite answer to this is a ”No”.
If you are going to invest in a real estate, you have to make sure that your earnings from that property is able to cover for the expenses you have spent on it. You have to take into account the utilities, mortgage payments, insurance, maintenance, and the taxes, and many more. It is unavoidable that some people may think that the home value will increase at one point and will pay for everything. But both a future home value and enough profit will not guarantee payments for those expenses. It is a much higher risk than it is often perceived.
Accounting the mortgage
Mortgage repayments will most likely lead us to the issue of how mortgages have a role in this. Truth be told, most people who will purchase a home whether for themselves or for investment purposes will do so with the use of mortgages. And so the question will arise if a mortgage must be used to buy a home for oneself or if it could also be used to rent the property out.
The answer to that is both. But since you need the rent payment to pay for the monthly mortgage fee, you cannot freely decide how much you will price the rent. We suggest using a mortgage affordability calculator when you are still planning in the first place.
Life you ought to have
Undoubtedly, the financial aspect is the most common reason for majority. However, some consider buying a home for themselves or for renting out purposes solely because of the lifestyle they have. Obviously, those who need a house for themselves will go for the first choice. Those people who buys a home as an investment must not entertain the thought of buying another one for themselves, unless they are too well-off!
A real estate investment wherein you buy a home to rent out for others will not necessarily mean a passive income. Though it is ideal for those who are willing to rent a place as of now.