Is There a Need For You to Purchase a Home for Yourself or as an Investment?
If you are planning to buy a house, then it is worth thinking over if you need it for yourself or you want to rent it out to people. Here are some tips that can help you 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. However, there are also other investments that are consistent and stable in terms of earning money even with the edges and downsides of the housing market. But is it really doubtfulness that you are going to earn? Is purchasing enough to guarantee your earnings as long as you are patient? I want to believe that you have guessed it right; the answer 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 will have to consider the utilities, mortgage payments, insurance, maintenance and the taxes just to name some. Some will also think that the home value will be at its highest at one point and will pay for everything. But a future home value and an enough earnings will not ensure payments for those expenses. It is a much higher risk than most times thought of.
Looking upon 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 it leads us to the question if a mortgage could only be used to buy a home for oneself or if it is allowed for renting out purposes.
The answer to that is both. But because you need the rent payment to cover for the monthly mortgage fee, how much tag you post for the rent will be quite challenging. We suggest using a mortgage affordability calculator when you are still planning in the first place.
Life you desire to have
Undoubtedly, the financial aspect has a huge role on this. Yet there are others who consider purchasing a home for themselves or for renting out purposes just because of the lifestyle they want to live. Undoubtedly, those in dire need of a home for themselves will pick the first choice. Those others who prefer the second option must avoid the thought of having the first choice too, unless they have that much money!
There is a misconception that a real estate property designed to be buy-to-rent indicates a passive income. Though it is ideal for those who are willing to rent a place as of now.