If you’re just entering the real estate market, it can be confusing trying to determine which home buying strategy to follow. While it’s common to hear real estate professionals recommend buying a home only if you plan to live there for the next 4 to 5 years, it’s important to consider the downside of waiting to purchase a property. Sure, if your home doesn’t increase much in value when it comes time to sell, you might lose money by not being able to recoup your initial closing costs and commissions.
However, let’s consider the consequences of postponing the purchase of a home. By waiting, you’re missing out on valuable money saving tax deductions each year. The real estate market can also take off driving home prices and loan rates beyond your reach. Over time, you could lose out on thousands of dollars in lost equity. While there are financial risks to buying a home short term, the potential loss of thousands in equity far outweigh the risks.
If you think you’ll have to move after several years, try researching how you can purchase one to turn a profit in a short period of time. Some ambitious homebuyers have created significant wealth by owning several properties in a short time span. One advice you should take to heart is real estate can always be a good investment,-providing you purchase one wisely.
Some home buyers are wise enough to profit from homes in need of repair. If you possess fundamental remodeling skills or at least willing to learn some basic skills, you can remodel and redecorate a property to earn thousands of dollars in increased equity when it comes time to sell.
While purchasing homes in need of repair can be rewarding, there are several other effective ways to make money from real estate. Some homebuyers make money upfront by searching out homes for sale at bargain prices. You can locate these bargain properties by searching for distressed sellers, houses going through probate, foreclosures, and properties returned to the bank (also called real estate owned) after a borrower fails to pay their mortgage payments.
For some homebuyers, one of the best short term buying strategies is a lease option. If you take advantage of renting with the option of purchase a property, you can build your credit, save cash toward a down payment with your rent credits, and lock in the purchase price against future inflation of housing prices.
One great advantage of lease options is the ability to opt out of purchasing a home and selling the option for a profit to another homebuyer if real estate prices climb upward. The new homebuyer can take advantage of your pre-negotiated market price and any rent credits you’ve accumulated.