One of the most important decisions a young professional has to make is wondering whether to invest in their own house. ‘Property finance’ is seen to be one of the important investment decisions today. While renting seems like the most cost-effective solution in the short term, in the long run, it is much better to invest in your property. Here, a new buyer would have to think about the appreciation of the property versus the cost of a similar property in the future with configurations and amenities. Let us take you through why owning a home and making this decision early on are important matters to consider.
Inflation is always a factor to consider when you are investing your money in anything. While rent might be manageable at the moment, there are factors that will more than likely cause another Global Financial Crisis in the years to come. Besides, some cities have revealed a great increase in the year on year average rental yield. Thus, due to inflation and higher rents, it makes much more financial sense to invest in your own home early. So put your money aside for property finance instead of sinking it in rent. In the former case, you will have a roof over your head but it won’t be owned by you, always a precarious situation to be in.
When you are renting there are many additional costs that you will incur. For one, there are always large security deposits, which means you will not be able to tap into that sum of money while you are renting. There are also other assorted costs from parking spaces, moving costs and more. All of these will be incurred with none of the security of ownership and make little financial sense.
This does not mean that there will not be other costs associated with buying a home of your own. In fact, there are quite a few costs in this case. Firstly, there are maintenance costs that will involve matters such as painting, upgrading certain areas, upkeep and more. Then there are always taxes to be paid, which will be regularly incurred. However, it is all offset by the security of having a roof over your head that is your own.
Coming into possession of your own home means you will incur a number of final payment from parties such as lenders, third parties and other middlemen. These are one time payments. These payments could have to be made in the name of stamp duty, property tax and home insurance. Thus, it would be much wiser to invest in your own home early and capitalise your savings in procuring property. Then you could pay off the closing costs earlier, as well, and subsequently have only taxes and maintenance to worry about.
If you have other saving goals in your life, for example, investing in a car, or creating a fund for your children’s education then it would be much wiser to invest in your own property earlier. Thus it is better to lean towards property finance earlier. In this way, you could get possession of your property sooner. Then, once you have a robust habit of making the payments associated with owning a home, you can invest in your other savings goals alongside. Or, you could come into early possession of your home and then concentrate wholly on saving to buy the car, electronics or even investing in a fund.
When you are renting a home you have to definitely invest in setting up your home. This could be a cost that is incurred many times over if you move from rental to rental. Appliances are needed in every home so that is always a cost incurred if you move houses a lot. Furniture is also a must so if you move a lot then you could be paying through the nose to furnish (or, at the very least, move your own furniture) every time you go to a new place. This would not be a factor, however, if you invest in your own home early. In that case, the furniture, appliances, lawn care equipment etc. you buy would be an investment instead of a recurring cost.
Property finance experts consider investing in a home early a good sign is because property is considered a great asset. While it is important to do your research and buy a good property, buying one early means you can also resell it sooner, and hopefully, turn a profit. The art of house flipping is considered quite lucrative. Many buyers buy a house to sell it quickly at a much higher rate. So this is also another option to keep in mind.
As you can see, all the signs point to buying a house earlier being a wiser choice. Thus, calculate your savings and buy your first home today with interest free home down payment assistance from HomeCapital. Even if your down payment is larger, it will just mean that you gain possession of your home sooner. And then, the world is your oyster and there are so many options available to you. So go for it and invest with care.
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HCPL and it's partners reserve the right to reject any application at any time in accordance to its policies. To qualify, a borrower must be a Indian citizen and meet our financial partners underwriting requirements. To check for an applicant’s eligibility, our lending partner will request your full credit report from one or more credit bureaus. Not all applicants receive the down payment assistance. To qualify for the program, you must have a responsible financial history and meet other conditions. Assistance limits displayed are indicative, actual limits will depend on number of factors. If approved, your program assistance tenure will depend on a variety of factors, including down payment assistance amount, repayment capacity, a responsible financial history, years of experience, income, home-loan to value ratio and other factors.
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