Understanding Timing in Real Estate
Bruce Swedal
October 28, 2009
Psychologists consider buying a home to be as stressful as divorce, serious illness, death and other life-changing events. But the more you know about buying a home, the less stressful the process becomes. Being aware of all options and potential pitfalls means you´ll be able to make the right series of informed decisions in the right order and you may even enjoy doing so.
Your rationalities for deciding to buy real estate sometimes include changing housing requirements, a desire to invest or to have a vacation residence, or just ready to stop throwing away rent money out the window. Whatever your reasons are, having a home can offer plenty of benefits. As a matter of fact, this transaction not only could improve your life quality, but it can be the most effective investment of your life.
Timing is everything in real estate. There are many things to consider before you buy a home. You will incur the responsibility of mortgage payments and caring for a home. Your money will be tied up in an investment that is not necessarily considered liquid. The pros outweigh the cons, and potential pitfalls can be avoided by working with the best professionals. But everything good and bad should be considered, as the timing of your purchase or the decision to buy could be affected.
First, think about all the reasons for making the purchase. Do you want to begin building wealth and stop wasting money in rent payments? Do you want a different lifestyle with a new housing arrangement? Do you want a vacation home? Are you looking for a way to diversify your investment portfolio with a safer, long-term investment? Do you need a tax write-off? All of these are good reasons for buying real estate.
Second, consider whether or not you are in a position to buy. If you are making an investment, is it a buyers market or sellers market? If your current investment portfolio is presently made up of only stocks, bonds and mutual funds, do you need to diversify? If your job requires you to move a great deal, do you plan to remain in the area for a sufficient amount of time to warrant a purchase?
Given closing costs and the amount of time needed for a property to appreciate in value, it may not make sense for you to buy now if you do not plan to live in the home for more than three years. If you want a larger home, can you afford it, based on your current income and savings? Or is your current income actually so high that you need a good tax deduction? Do you have credit problems that may prevent you from securing a loan? Will your future income and housing requirements be changing and will the home be affordable and functional then?
Its easier to answer these questions when you consider in more detail the implications and benefits of owning real estate. Now may be a good time to meet with your accountant or financial planner. The process of applying for a loan or becoming pre-qualified at a bank will also help you answer questions regarding the affordability of a home.
Morrison Homes Denver Real Estate
Your rationalities for deciding to buy real estate sometimes include changing housing requirements, a desire to invest or to have a vacation residence, or just ready to stop throwing away rent money out the window. Whatever your reasons are, having a home can offer plenty of benefits. As a matter of fact, this transaction not only could improve your life quality, but it can be the most effective investment of your life.
Timing is everything in real estate. There are many things to consider before you buy a home. You will incur the responsibility of mortgage payments and caring for a home. Your money will be tied up in an investment that is not necessarily considered liquid. The pros outweigh the cons, and potential pitfalls can be avoided by working with the best professionals. But everything good and bad should be considered, as the timing of your purchase or the decision to buy could be affected.
First, think about all the reasons for making the purchase. Do you want to begin building wealth and stop wasting money in rent payments? Do you want a different lifestyle with a new housing arrangement? Do you want a vacation home? Are you looking for a way to diversify your investment portfolio with a safer, long-term investment? Do you need a tax write-off? All of these are good reasons for buying real estate.
Second, consider whether or not you are in a position to buy. If you are making an investment, is it a buyers market or sellers market? If your current investment portfolio is presently made up of only stocks, bonds and mutual funds, do you need to diversify? If your job requires you to move a great deal, do you plan to remain in the area for a sufficient amount of time to warrant a purchase?
Given closing costs and the amount of time needed for a property to appreciate in value, it may not make sense for you to buy now if you do not plan to live in the home for more than three years. If you want a larger home, can you afford it, based on your current income and savings? Or is your current income actually so high that you need a good tax deduction? Do you have credit problems that may prevent you from securing a loan? Will your future income and housing requirements be changing and will the home be affordable and functional then?
Its easier to answer these questions when you consider in more detail the implications and benefits of owning real estate. Now may be a good time to meet with your accountant or financial planner. The process of applying for a loan or becoming pre-qualified at a bank will also help you answer questions regarding the affordability of a home.
Morrison Homes Denver Real Estate