Owning a Home - the Investment of a Lifetime

Cool recently asked Nelson to make a weekly newspaper column, I was initially concerned that it would not be enough to write. That notion lasted about three hours, until I considered the seemingly endless supply of topics. So, where to start. Column on the properties should start with the obvious. "Owning a Home-on investment in life."

If you plan to become rich from bank savings, the dream of. The effects of inflation and tax sabotage any potential real growth in overall savings account. Real estate, on the other hand, provides a good opportunity to accumulate wealth in the future. Almost everything else you buy today, vehicles, equipment, furniture, begins to decline as soon as you buy it. But real estate has historically exceeded the rate of inflation.

Of course, the bad economic times, house prices may vary, but most well-located properties will appreciate in value over the long term. And while you can find at home today may seem to have outlandish price, the cost is likely to be significantly higher in the future. You have heard it before: "I could have bought the house 10 years ago for one-half of what is now." Where to invest in real estate, it is never too late.

For most people, owning their own is one of the largest investment life. For many retirees, a pay-out of the house may mean comfortable retirement. In Canada, 63 per cent of all households own their own home according to the 1991 Canadian census. And with today's low mortgage rates, more and more home buyers to take the opportunity to enter the housing market.


Advantages of Owning Home

To begin with, owning your own home is a sound investment. Your property will most likely increase in value, and you can sell it for a profit. Your capital (cash, the difference between the market value of your home, and the amount, but you must on your mortgage) will grow, and the value of your home is increasing, resulting in a stable home ownership and safe investment for you.

The surge in prices in North American real estate during this century has been phenomenal. Inflation is not the only factor that accounted for these increases. Other factors, such as population growth, which requires housing and offers limited land, resulting in an increase in the value of the land.

I do not want to dwell on the past, but I would be happy to pay the person who bought my grandmother's house on Stanley Street in the $ 14000 they paid in 1973.

A great time to buy a house is before or during the early stages of the housing boom in new home construction costs went to the time and energy prices on existing homes up.

Also, in real estate, you will not only come from their savings, but from borrowing more. Without the leverage (use of financing to allow a small amount of money to purchase a property investment), it is difficult to obtain a reasonable return on investment (not that many people can afford to buy housing today without the help of borrowed money).

For example, suppose you bought a $ 100000 house (hard to find great, but as an example), with 10 per cent advance, using 90% leverage ($ 90,000) and a year later, the value of homes has increased by 10% to $ 110000. Since he appreciates the $ 10000 and investments $ 10000 return on investment is 100%. On the other hand, if you bought in the same house for $ 100000 in cash, the return on investment would be only 10%. Therefore, getting more leverage, as can be when buying real estate offers you a lot more returns on invested dollars.

Finally, there is also the pride of owning your own home that can give you and your family a sense of security. Owning your own house offers you a private, as a rule, more living space and more flexibility to make changes to the house and grounds.