Deciding if buying home is a good investment can be hair-splitting for the first time homebuyer. There are a lot of factors that influences the value of a home investment-top on the list is liquidity. Even though buying a home can be challenging and is a huge responsibility, it still offers many benefits.
Over the years, real estate has become a great investment option because it is one of the best avenues for investing money. With real estate investments, you get to save money on taxes and when done right, greater returns on investments.
What Are The Benefits Of Owning A Home?
Mortgage is far less expensive than rent
You will spend less money on a mortgage on a home as opposed to renting it. Unfortunately, one of the things that make homeownership difficult for prospective buyers is the down payment required. Thankfully, in some states, there are programs that have been set up to assist first-time homebuyer purchase a home at a lower down payment costs.
Equity
Home appreciation value over time is called home equity. The more you service off your mortgage payments, the higher the equity becomes on your home becomes. This is also a great way to secure the money that can be used by your next home.
The potential return on investment
Although homeownership is not an investment strategy that is one hundred percent foolproof( it used to be) – no investment really is. Property owners who bought homes in the early 2000s but had to foreclose, or sell at a major loss can attest to that. The alternative, however -paying rent -offers no investment value at all. In spite of the risk of ownership, it comes with the possibility of great returns on investments
Tax benefits
Taxes are not the most exciting part of owning a home but the money you can save can be. When you pay interest on the mortgage of your property, it is tax-deductible. A federal tax deduction can also be taken on the real estate taxes you paid in a particular fiscal year
A sense of ownership
This benefit cannot be measured tangibly but the sense of ownership is one of the most important aspects of owning a home. You basically have control over your property -you can remodel, paint your walls, install a fireplace and make other major/minor home improvements without having to consult a landlord.
How To Increase Home Value
Regular renovations and maintenance is a great way to improve the value of your home – whether you are looking to sell in a couple of years or intend to sell at the moment. You can also include some minor/major additions to your property to increase its value.
Listed below are some long-term, midterm and short-term home renovation ideas that improve home value.
Long-term
To increase the long-term value of your home, paying off your mortgage is the way to gain equity. And with proper maintenance, the value of a property generally would increase as time goes by.
Midterm
If you would like to make changes to your home, so you can improve its value, you should consider some of those projects:
- Installing an extra bathroom(because there is no such thing as too many bathrooms)
- Master suite – if there isn’t one
- Complete kitchen renovation
- Attach an extra bedroom for guests
- Finish the basement – for example, turn it into a home office or a game roll.
Short-term
A lot of homeowners look for quick ways to improve the value of a property they intend to sell. Although, it would be impossible to improve the price value of your home dramatically, taking on some modeling projects can help you sell it fast.
Here are a few ideas:
- Give walls fresh paint in neutral colors
- Keep the roof well maintained or install a new one.
- Fresh landscaping
- Refinish old or install new kitchen cabinets
- Install smart lights to save energy
Let’s Talk Insurance – High-value Home Insurance
High-value home insurance is designed to provide high-value properties such as heritage homes or properties with special design elements or features. This product offers one of the most comprehensive insurance packages available on the insurance market and is a great choice if you qualify for it.
High-value home insurance can also be purchased by renters or owners of high-value condos. This insurance product is based on the lifestyle of people who live there – that is, the reconstruction value of the property – not the real estate value.
It’s always a good time to buy a home as long as the benefits stated above far outweigh the downside. Every investment is a risk, but for the person who has done has done his research, it’s a calculated risk worth taking.
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