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 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
Definitely, real estate is known to be one of the safest type of investment that exists. 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 ensure your earnings as long as you are patient enough? You might have kept it to yourself but I know that you know the exact answer to this: No.
If you are going to invest in a real estate, your earnings from that property must be able to fill-in the expenses you have spent on it. You have to look upon the utilities, mortgage payments, insurance, maintenance, 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 a future home value and an enough earnings will not ensure payments for those expenses. It is a much higher risk than it is often perceived.
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 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 cover for the monthly mortgage fee, you cannot freely put a tag on your rent. We advise that you use a mortgage affordability calculator during the planning phase.
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. Obviously, those who need a house for themselves will go for the first choice. Those people who will buy a home as an investment must not entertain the thought of doing both options, unless they are that rich!
There is a misconception that a real estate property designed to be buy-to-rent indicates a passive income. Though it is ideal for the people who does not find a problem with renting a place as of now.