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Owning a Home vs. Investment Property

Owning a Home vs. Investment PropertyWhen looking at the history of the real estate housing market, it has shown to be a stable and reliable investment. Home prices have continued to rise year after year with no indication of a major housing bubble ready to pop.

According to the Kazlac brothers, sales representatives for ROYAL LePAGE Realty, whether you invest in real estate or stocks, you should understand that both go through phases of ups and downs. However, there are less periods of decline in real estate than there are in stocks. If you keep track of the housing market and hire professionals, such as real estate agents and property managers, then real estate can be a very reliable and safe investment source.

If you are thinking about investing in property, here are some things you need to be aware of:

  • If you are looking to purchase a property and actually live there for about 5 years or so, then you are in a better position to capitalize on the market and dictate a time convenient for you to make an educated decision whether it is time to sell or stay for a longer duration. You have the luxury to ”˜time the market’. History has indicated an increase in average home prices year after year, so chances are you will have seen financial growth in your home.
  • For those who are looking to purchase a property to generate a rental income, you will be in the same boat as those who actually live in the home. Meaning you have the luxury to sit on the property until a time comes where you feel you can capitalize on favorable seller market conditions. Until then, you will continue to receive income to pay the mortgage, and maintain the property.

 

There are a few ideas of how someone can purchase a property for a long term or short term investment.

  1. Purchase a preconstruction condo or house then sell once title is put in your name.
  2. Purchase vacant land with the intention to build in the future.
  3. Purchase a home that requires renovation and improvement, then sell it for more once completed.
  4. Purchase a home that contains 2 or more dwelling units. The home owner will live in one unit while the renter lives in the other.

There are financial benefits to gain by owning a property.

You will receive tax benefits if there are improvements made to the property. The government will issue rebate programs for making eco-friendly renovations. The homeowners can use the equity in their home as security for other loans. As you build equity in your home it allows you to be in a better position in the future to potentially move and upsize or upgrade your home. Also, if you own an investment property the Mortgages are tax-deductible.


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