If you live in Southern California, no doubt you have seen what’s happening with home prices. They keep going up, and up, and up. Your friends, family have bought homes, you have seen their net worth increase on account of it, and perhaps you are wondering if you should follow suit! There are some fundamental questions you need to ask yourself.
- Why should I buy a house? – There are different reasons and needs. If your family is growing and you are running out of room, you may want to seriously consider buying a home instead of moving to another rental. Start investing in your own future wealth rather than keep making the landlord rich.
- How long would I stay at my new home? This is a key question. If you buy a home now and only plan on being there a few short years, buying may not be the best choice. That is unless you can rent the new home if you move, and this is a very reasonable strategy. Especially since buying an owner-occupied home requires a very small down payment, as little as 3.5%. If your needs change and you end up moving, you then would have an investment home which you can rent out. And you did not have to come up with the large 20%+ down for investment property. Beware, your intent must be to occupy the home to begin with.
- Can I afford the monthly investment in a home? Needless to say, you don’t want to get in over your head. You may be surprised how affordable it can be to own though. After taking into account tax savings, principal reduction on your mortgage, etc. It may make a lot of sense to buy instead of renting.
These are just a few of the questions you will need solid answers to before investing in a home. If this is your first time considering a purchase, you would be well advised to consult with the proper professionals to find out just what this may mean to you and your family. I am happy to offer my experience along with that of my team of professionals to help guide you through this journey. Feel free to contact me if you are considering a home purchase and make sure you make an informed decision either way.
