Home Ownership Investment Advantages And Disadvantages.

Buying a home is a lifelong wish for most individuals as this gives them security and also acts as a profitable investment in the long run. However, there are various difficulties while buying a home and then finding a good amount for the same as well.

Home Ownership Investment Advantages And Disadvantages.

There are many things to look out for while buying a house and the most important is the location of the house. Before owning a house one should consider that whether owning a house is the right thing for oneself. Many people have expressed that staying in their home is much safer and comfortable as compared to renting a house.

Home Ownership Investment Advantages And Disadvantages.

Various Advantages Of Owning A Home Are: –

  • Attractive Long term Benefit: –

Owning your home is a long-term investment. Many homeowners buy a home thinking that the property price will rise quickly, however that is not the case and real estate price rises very slowly. But if you stay in that house for a long period of time you will be able to sell it off at a very good price making good profits as well. 

  • Tax exemptions on purchase of property

When a person buys a home on loan then there are many tax exemptions granted to that person by the government. Many people buy a house so that they can save their tax money and also this acts as an investment as well serving 2 things in one go.

  • Equity build up by owning a home: –

Over a course of time, the rental payment might not make you any equity accumulation, however, buying a house will do this task. As time progresses the mortgage balance will be lower and that of the equity will rise up. 

  • Savings on purchase of home: –

Over a course of time, one will notice that the savings are more when they stay in their own home rather than living on rental property. After a few years, the difference in amount will be reduced and the rental house will start looking more expensive.

  • Fixed Cost: –

Over a period of time, the rental cost will increase however the mortgage on the house remains constant, and also the house starts raising its value over time as well. 

Some Issues Faced By People While Buying A House:

  • Huge capital upfront

While buying a home you need to put up a huge deposit which could be roughly about 5 – 10% of the total price of the house. At first, this could be too high but has long-term benefits if thought properly. Apart from this, there needs to be additional revenue like the paperwork, the lawyer fees, and broker fees if any.

  • Illiquidity

Unlike stocks and gold, houses cannot be easily sold whenever we want. First, we would need to find potential buyers who would agree to the rate mentioned and we can’t share a part of the house we will have to sell it fully. While selling there are paperwork fees and broker fees if any broker is involved in the transaction.

  • Potential Depreciation

Many times people invest in real estate thinking that the price of houses will go up, but this is not always the case, there are times when the property price might even go low which might make you lose money while selling it off. This is one of the main reasons why people look for good locations which have good growth potential and mainly why people prefer homes in the city as the value of land in the city would never go down.

  • Financial responsibility

If you had taken a mortgage then you need to adjust your finances accordingly as you need to pay EMI every month to the bank. Late repayment will make your credit score look bad and also increase the rate of interest as well which is bad.

Conclusion:

The final conclusion is that owning a home is the best investment as it provides safety and comfort and will be highly profitable in the long run as there won’t be any financial dependency or a family won’t have to move from time to time to a new place.

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