Is Buying A House A Good Investment
 

Is buying house a good investment?

06-Jun-2018
 

Buying your first home can be a daunting task. Deciding whether or not investing in a home is a good idea is more or less complicated task! There are many people who can help you with what type of properties suits your requirements and budget or where and how to get things done to own your first home, but taking the call of whether or not you need to invest in a home is totally your decision. Investing in a home is one of those things where you should not make a wrong decision! Buying a home or investing in your first property can be a good or bad idea depending upon a lot of factors including the intent of the investment, the time horizon of your investment, the liquidity factor and so on. Put it simply, there's no hard and fast rule which will tell you whether or not buying a house is a good investment for you. But there are certain circumstances where buying a home make perfect sense to you and might help you increase your wealth. This blog is an overview of such situations where buying a house is a great idea. Read on!

So, Is Buying A House A Good Investment?

You need to ask yourself 3 questions to know if buying a home is a good idea for you.

Question # 1 - What is the intent of your investment?:

The intent behind your investment is the first thing you need to know before you jump into the bulsiness of buying your first home. Do you want to invest in a home because you want your own place to live in without being answerable to any landlords? Or do you want to invest in your home because you're hoping to make more money after 3 to 5 years by selling it off? Answering these questions is very important because they determine the kind of properties you must be looking for and whether your whole idea of investing in properties makes sense to you or not.

If you want to buy a home because you wish to live in a property that's your own, the owning a home is a great option for you. But on the other hand, if you're looking to make profits in the future by selling the property, you should better be looking at commercial properties with high value appreciation potential. So, depending on your intent of purchase, you can determine whether buying a home is a good investment for you.

Question # 2 - The time horizon of your holding of the property:

If you plan to live in your home for a couple of years and later sell it away, investing in a home might not be a great idea. In this case, you could rather invest in more profitable property deals like commercial real estate investment. On the other hand, if you wish to hold your home without selling it for a long period of time, say 15 to 20 years, you're in for great profits. Investing in land or properties for long period of time is a great idea as the value of land and properties almost always increase and do not come down, except in special circumstances. So if you're looking at your home as your residence for more than 15 years and then sell it away and make a fortune out of it, buying a home is a good investment for you.

Question # 3 - What is the liquidity of funds you have?:

Investing in a home means setting aside a major portion of your earnings. It's an equity investment and converting this investment into cash takes a long time and lots of processing. Thus, before you lock your funds into investing in a home, you must be sure of your financial conditions where you still have other sources of income or other investments that are more liquid-able in nature. If you already have enough liquid-able assets or investments, then buying a home is a good investment by all means.

Hope you found this article on ‘is buying a house a good investment?’ helpful. If you need more expert advice on real estate property investment then do reach our advisors for professional help. Also, if you are actively searching for homes with high-value appreciation potential in Palakkad and Coimbatore then do explore our portfolio of uniquely crafted villas in Palakkad and Coimbatore with all modern facilities.

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