Devine
writes…..
Your
home: investment or shelter?
Why buy a home these days? Prices seem to be flat, at best, in all but a
few areas. And sometimes, even with tax
considerations, renting can be cheaper.
You can even make more money with relatively low-risk investments in
securities. At least, that’s what some
folks say.
Others will talk about pride of
ownership, peace of mind and all the other factors that have driven the home
purchase market for the past several generations. Which point of view is right? Both. It depends on your objective and
viewpoint.
If you want to make money,
homeownership is not a good short-term strategy, except in the high-pressure
times of rapidly rising prices and feeding frenzies, the like of which we
haven’t seen in about a half-dozen years.
In those cycles, some folks bought a home at what seemed to be top
dollar, then resold it at a profit within months. That’s not a normal economic environment. But over the long term – more than five years
and perhaps more like a decade – home purchases do about as well as bank
accounts as a form of savings. The key
attraction, then, must be the security of shelter in a stable neighborhood,
with the protection of a fixed-rate mortage and slowly rising property
taxes. That doesn’t sound like fast-lane
speculation, nor is it meant to be.
Decide on your goals, your needs and
your temperament, as you forecast your hosing priorities.
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