Property investment in real estate is one of the big givens- even if you aren’t looking to be a real estate maven, you probably expect that you ‘have’ to own your own house by some arbitrary age. It’s one of those things that pop culture, educators, our parents and society present as an absolute given. It’s also the big myth of real estate. Below, we tell you more.
So, I have to invest in real estate for my personal use, right?
Wrong! This theme, however, is one of the major ones that any given real estate expert has seen over and over and over again. And these gifted and properly real estate educated people will often shake their head in wonder. The two main reasons people give are usually that a house you will be using for living is ‘a good investment’ or that rent is ‘money thrown away’. These experts will tell you that these are mostly wrong- but people don’t like hearing it.
It’s cultural conditioning, not sane investment advice.
Not that a real estate expert will actually discourage you for making the first step on the ladder, if that’s the right thing for your needs right now. You see, these experts have actual knowledge of the markets and trends we are pretending to understand when we go ‘it’s leverage’ or ‘it’s for the tax benefits’. They want you to appreciate the facts too. So, when you say that renting is wasting money and a house wouldn’t…can you show the correct figures for that? And show why?
If you want to make that big first step into real estate for ‘leverage’, do you understand how leverage works and that leverage works two ways? If it’s for ‘tax benefits’- what are they? Your first piece of real estate is one of the biggest purchases you will ever make. There is little wonder the experts are asking you to properly understand what you are doing.
Why is this so important?
You see, these same professionals are the ones who see people feel cheated when the realise their cost of ownership goes far past their mortgage, or that they are in fact wasting more money than they were renting, or any of the other ways in which the layperson’s lack of real estate knowledge shows so easily.
In the end, they are not advising that you do not, ever, buy a family home. What they are asking for is that the layperson does their work first, and finds out exactly how and why owning a house will impact their lives. They are asking for people to understand real estate figures, know how a broker will work with you, and use common financial sense in planning the right moment- not the whining voice of your parents in your ear going ‘you should own a house by now’.
Real estate can be a great investment, and there is a real something in owning your own home- as long as you properly plan and understand what that means to you and your budget. Things to learn here: http://www.buytetonrealestate.com/.