There are essentially two types of purchases that you can make: purchases that will increase in value over time, and purchases that will depreciate. Houses can go either way. If you don’t properly invest into your home then you may well see it becoming worth even less than you spent on it to begin with.
Here are a few tips to investing in your home and making sure that it’s worth more tomorrow than it is today:
Find Great Mortgage Loan Rates
Without great mortgage loan rates you wind up with a home that you’re still paying off long after you’ve actually paid the purchase price. You have interest rates and fees and fines when you make late payments, you may even wind up having to take out a second mortgage. Getting the right mortgage the first time is a big part of getting ahead on your home and winding up with an investment, not an expense.
Improve Your Own Neighborhood
A lot of people will buy a home and then worry that it’s depreciating in value because their neighbors are being foreclosed upon, local businesses are being shut down and so on and the value of the whole area is dropping no matter how much work they put into keeping their house in good condition. Well, what’s to stop these people from improving their own neighborhoods? There’s no reason to try and find a home in a great neighborhood if you’re not even going to support the small businesses in that area. There’s no reason to find a great neighborhood if you’re not going to talk to your neighbors. Be a part of your community, help out with community efforts, host barbecues on your front lawn to get to know the neighbors. Make your neighborhood a good place to live.
Wait for the Market
People who become overly anxious or worried about housing market slumps are missing the big picture and thinking in the short term. This is good news for you as an investor as it means that they’re often trying to bail out on a home simply because the price is dropping. The housing market always has ups and downs, it always comes back sooner or later. For the patient investor the housing slumps can be a major part of your strategy, but by riding out the slumps, at the very least, and waiting until the market looks better to try and make a sale. The economy may still be recovering right now, but a weak housing market right now does not necessarily mean that it will still be weak in five years. The patient prosper in real estate.
Renting Out
You don’t need to sell your home in order to turn a profit, you can turn it into a rental property. You don’t even need to spend a lot of money or worry too much about finding tenants to do this. Chances are you have a friend, a co-worker or a cousin who you can rent the home to at a fair price. Enough to cover mortgage payments, maintenance costs and so on. This can be a good way to turn a profit immediately or to allow your home to pay for itself while waiting until the perfect time to sell.
Whatever your long term strategy when it comes to investing in your home, long term planning is key. If you’re only looking to flip a home in a few month’s time you might not always get what you want out of the deal, but if you’re patient and hard working you may be able to turn a nice profit.
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Written by Jon the Saver
