I hope you guys don’t think that I’m against real estate. In my last post here, I wrote about some of the common real estate misconceptions. It’s not that I’m against real estate. I simply wanted to stress all of the factors that go into making this ultra important decision. Too often do 20-somethings take this decision extremely lightly. I’ll never tell you what to do, but I do want you guys to make educated decisions.
The irony of this topic is that I just moved into a new condo this summer. I personally feel that it was a great decision, considering all of the factors involved (to be discussed soon). Today I wanted to write about some of the positives when it comes to real estate.
Many of us young people simply can’t save money. We just can’t do it. Having a mortgage to pay forces us to technically save money every month. For many people a home is their main investment/savings vehicle. The money that is paid towards a mortgage could be frivolously spent on random purchases. Instead this money is put towards the real estate property. I’m not say that this is good or bad, but it is what it is.
Of course the obvious caveat exists. Along with being forced to save money, you’ll also lose lots to money to the expenses that go along with real estate (interest, of course!). Please do keep this in mind.
Your primary residence may not be the worlds greatest investment. However, there’s always the potential for an appreciation in value. The appreciation in value isn’t always the greatest and it won’t always offset the fees involved with selling a home. However, depending on the area it’s not rare for home owners to experience great appreciation gains.
It’s also imperative to note that, your property can appreciate due to two reasons:
This may seem superfluous at first, but it’s actually completely relevant. In my experiences, home ownership is a harsh reality slap across the face that some young professionals need. Our generation is generally fairly spoiled. We’ve all heard that 27 is the new 21. Often times we need to get out of our comfort zones. Whether it be through moving out or working abroad for a year, every situation varies on a case by case basis. Moving out can be the first slap of reality that we need to become truly responsible adults.
What are some of the positives of real estate/home ownership that I may have missed?
Just please remember to always conduct your own research when it comes to real estate. There’s thousands of dollars at risk here. This is also the most important decision that you’ll make in your life (aside from marriage & education), so please don’t take it lightly.
image source: robbruce1964
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