There comes a time when people want to become a homeowner and buy their first home. This is due to the desire to leave the rental market, provide additional space to a growing family, or spend saved capital on an investment. Either way, it’s safe to say real estate in any way, shape, or form has proven to be a great long-term investment.
When deciding on how to get into the residential real estate market, there are 3 key factors to consider:
How much money you have saved for a down payment and how much mortgage you can afford per month determines the budget. Your budget also determines the size of the home you can afford. Whether it’s a modular home, apartment, or conventional home. Budget is especially important because this determines location. Budget means larger space at the expense of a less popular, further away from the city home or a smaller, city-dwelling.
When investing in any type of real estate, you’re certain to hear the old saying: “Location. Location. Location.” Location is a major playing factor in the price of real estate. Location influences how much supply and demand for higher desired locations such as city centers. Close proximity to nature, city centers, and entertainment often mean a higher price of real estate. This is due to the convenience of getting around and the desirability for people to live there. Whether you plan to live off the grid or around bigger cities, location is one of the most important factors to keep in mind.
Your newly bought home doesn’t necessarily have to mean a home that you reside in. Homes are also investments that can be rented. If in the proper market and timing, they could also generate enough rental revenue to cover their own mortgage. Another goal to keep in mind is how long you plan to keep the home. Is it a short-term investment in a hot market that you plan to flip? Or is it a long-term investment that you prefer to hold and let it gain value?
In most circumstances, especially long-term, it is safe to say that residential real estate is the safest, most valuable investment. This is due to its almost guaranteed growth in value over time, and in some cases, its ability to generate rental income from tenants.