The Truth About Buying a Home Vs an Investment
Read this before going to your next open house. For many people, their home will be the biggest purchase they ever make. Considering this, it is no surprise they may see it as an investment. If you are one of these people, I have bad news. You may want to sit down for this. Your home is not an investment.
While buying real estate has commonalities regardless of the type of real estate, the process of buying a home and buying an investment are different. If you don’t know which of the two you are doing you are leaving the door open for buyer’s remorse.
To save you the heartache, here are some timeless tips on buying a home vs an investment property that hold true regardless of what year it is, if it’s a recession, booming market, seller’s market or buyer’s market.
Should You Buy a Home vs. an Investment?
This is not a discussion about renting vs. buying but rather what to do once you have decided you want to own and invest in real estate. For most people this will start with the purchase of an owner-occupant property. This property can be a home, an investment or both depending on your long-term intention.
If you are buying an investment, your primary long-term intention is to make a profit from owning the property. If you are buying a home, your primary long-term intention is to have a place to call your own. It will be where you reside until some life event, such as a growing family, requires you to uproot and move.
Which one should you buy? First consider which goal is most important to you. If you have already started searching, which goal has been guiding you so far? If there is a mismatch then the next few tips should help realign your search with your goals.
Investment Property buying process
What is the first thing you think of when deciding to buy an investment property? Maybe the type of property you will buy or how much of a return you will make from your investment.
If you are buying an investment property you have to consider these two things or you will be overwhelmed by the number of properties you could purchase. This will also set the standard that lets you know if you have been successful.
Next you will consider the market. When buying an investment property, you have more flexibility when choosing a market. You will also be looking at different factors when selecting the neigh