Is Buying a House a Good Money Making Venture?
They say that it isn’t just about having your own place to live. Buying your own house is also an investment. More than just finally reaping the fruits of your own labour, a lot of people has seen home ownership to be a significant income generator. property investment experts have often been talking about how you can become a bit richer by buying your own house and stepping onto the property ladder.
But even though it’s given and that you could find it really exciting, buying a property requires a lot of work and careful consideration. You need to still determine your own purpose for buying and work out a feasible plan for your objectives. If you’re main target is to just have a permanent place to live in, you not very likely to increase your earnings by buying a property.
But how can you potentially increase your earnings by investing on a property? Here are a few ways.
Leveraging on the Property’s Value
The truth is you’re already rich, at least in paper, when you buy your own house. Your assets portfolio can attest to that. But what makes you even richer is when the house’s market value increases over time. After a few years you’ll realise it’s worth more than how much you bought it for. This means, you can use that equity to take out a loan and start your own business.
Moreover, your property’s value can also be used as a leverage to buy another property. You can perhaps borrow some more money from the bank, using your current property as collateral, and buy another one that you can rent out. Soon as everything sets in, you’ll find you’ve created an income generating venture through the properties you bought.
Buy and Sell
It’s a bit of a challenge but once you learn the ropes, the rest will be convenient. Don’t just buy, wait for the market value to increase, and resell. Know better by looking to buy something with less market value - a repossessed property or a bank foreclosed home - and selling it for a higher price but still within its market value. You don’t need to wait for the market price to shoot up before you sell.
You can also buy, renovate, and resell. Just be sure to factor in the current market trends and how much you spend on renovation.
Buy to Let
Everybody needs a home, even those always on the move. Rented accommodation is in demand in most commercial and business areas, so take advantage of it. Find a good location with a reasonable demand for rental accommodation and check to see the average price of the properties around. Buy, redesign a little, and have it up for rent.
At present, buy to let is a promising investment. Just always be careful with where you’re buying the property from and the people you’d want to rent the place. Do a careful screening of potential tenants and make sure you’re not getting yourself involved with someone who runs away from payment obligations or causes trouble.
Also, take heed of the maintenance and management of your buy to let property. Factor this in when calculating how much you’re looking to have the house up for rent and how much you expect to earn.
In a nutshell, buying a house, besides owning and living in it, is an exciting prospect. The possibility of increasing your earnings makes it even more attractive and you, together with a lot more people can actually benefit from property investment, given proper moves, advice, and careful consideration of surrounding factors. Just always be sure to define your purpose before moving forward.