Your home is your castle, an immense source of pride where you can live securely and comfortably. But your home is also a very important investment, probably the most important investment you will ever make. Your home can make you rich in a way that renting never can. To do so, you need to think of your home as an investment.
Suppose that you decide to buy a home and find the perfect home on a lovely street with beautiful trees. This house isn’t the biggest on the street, nor the smallest. Every home in the neighborhood is in good condition: mowed lawns, pruned roses, no barking dogs behind chain-link fences, and no rusted-out cars on blocks. When your realtor showed you the house, several neighbors stopped to chat and they all seemed very friendly.
This house is close to parks, shopping, and your job. The schools have a good reputation and the city has long prided itself on doing what it takes to improve the community and enhance property values—sponsoring youth sports programs and popular activities for adults and senior citizens, having summer concerts in the park, purchasing open spaces, supporting local businesses, and blocking strip-mall blight. The house is a cute bungalow, with three bedrooms and two baths—just what you have spent months looking for in a home. The modern kitchen is spacious, with a cork floor and granite countertops. The doors are solid hardwood, the windows are double paned, and the ceilings are 10-feethigh. The walls and attic are well insulated, which will help lower the heating and air-conditioning bills. The big back-yard has room for children to play and a sunny spot for a vegetable garden. And this home will look even better with your furniture inside and with a different color of paint on the outside. The asking price is in line with what similar homes are selling for in this area..
Is there anything else to think about? Yes! You need to think of your home as an investment. First, can you really afford it? You have saved money for a down payment, but you’re still about $10,000 short. You can possibly borrow some money from relatives, but how will you pay them back and what strings will be attached? Or maybe you can borrow money with one of your credit cards. What about the monthly mortgage payments? It seems like a real stretch, but maybe you can cutback elsewhere: fewer restaurants and no new clothes or vacations for awhile. Or maybe you can use your credit cards to help with the monthly payments as well as the down payment. How do you know if you can really afford to buy a home?...[ Buy Now ]
Chapter 3:
Now is a Good Time to Own a Home
During the 2000–2005 run-up in home prices in the United States, stories appeared in newspapers, magazines, and on television about house flippers—people with big grins and fistfuls of cash who were buying homes in hot markets, hoping to sell them for a big profit a short while later. They never intended to live in these homes, just flip them for a profit. In some cases, they would buy several homes under construction, hoping to resell them before the homes were finished. We didn’t write this book for these speculators. We wrote this book for people like you, who plan to live in your home for many years and want to know if homeownership is likely to be profitable in the long run. For most people in most places, now is a good time to own a home! If you already own a home, congratulations. If you don’t yet own a home, you should think about buying one. Twenty years from now, you will probably look back and say that this was the best purchase you ever made. We can confidently make that statement even though we don’t know what your home’s price will be 20 years from now. People who think that home prices have to increase rapidly for a home to be a great investment are wrong. It is the home dividend™ that will make your home a great investment. This chapter explains why and shows you how to estimate your home dividend™…[ Buy Now ]
