Why You Should Think of Your First Home as an Investment

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Veselina Dzhingarova writes: Being young and buying a new home is an exciting time in your life. Perhaps you have just got married or are looking to get away from that wild and crazy apartment lifestyle. Whatever your reasons for looking for a new home, one thing you should be aware of is that this is going to be a major investment. At the moment you are just looking at the fact that it will be yours, all yours, but it is so much more than that. If you think of it as an investment in your future, you can use that new home as a stepping stone to bigger and better things. Consider the following advantages and you’ll see why.

Building Equity

Unless you fail to take care of your home, it can do nothing but rise in value. Most often you will buy a house through financing and once you’ve paid into the loan for a number of years, the value of the house will exceed what is owed on it. As well, prices continue to rise. At some point, the house will be worth so much more than its original cost. All of this is called building equity. You can now use this equity to finance another home or you can continue to let the equity grow. Real estate advisors like Hurford Salvi Carr can help you find homes that will enable you to grow your investment.

Government Incentives

There are a number of government incentives and grants available to first-time home buyers. Each of these incentives provide government money, given for free, to help those who would otherwise be unable to afford a home. Bear in mind that these incentives are only available once. You are only a ‘first time buyer’ once in your lifetime. The incentives currently available are:

• Shared Ownership
• Help to Buy
• NewBuy

Each of these government schemes are designed a bit differently. Some match money you put into an ISA whilst others enable you to buy a home with as little as 5% down. Take the time to find a government grant or incentive that suits you as this is money the government is investing in you. It is a way to help you invest in your future.

Potential Future Rental Income

When you first buy a home it is likely you aren’t thinking of moving right away. That’s okay! Stay put and build up equity. You remember that, right? Equity is where the house’s value is worth more than you owe on it, or to put it another way, your share of the home. Once you’ve built up enough equity, why not take a loan against that equity to buy a bigger and better home? You can let out your current home as an added source of income. Lenders will look on that favourably which will add to your chances of getting a new loan.

Buying your first home is exciting, it is true. You derive a personal sense of accomplishment and are eager to move in. However, don’t ever lose sight of the fact that this home is an investment in your future. You have a place to live that you can call your own but you also have the opportunity to use this home as the first leg on your journey to financial freedom. This is why you should think of your new home as an investment.

By Veselina Dzhingarova

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