Don't Make It Weird
Before every (most) new client meeting I sit down and have a chat, usually
over a cup of coffee or a cocktail. Yes, I really do this. And the conversation usually starts like this:
“So we want to buy a house and our budget is $XXX and we want X bedrooms, Y baths in Highlands, Berkeley, Sloan’s Lake, Edgewater, etc. And we want to make sure we see good appreciation over the next 5 years or so.”
If you’re thinking, “this seems natural and commonplace”, then consider this article a call to action.
A lot of folks think about Real Estate as an investment, but the term “investment” is far less applicable than most people think.
An investment property implies you already own a primary residence aka a place to live and you're looking to add a stream of income in the form of rental revenue.
So if you rent your home and are looking to buy then your situation dictates that you’re not purchasing an investment property, you’re just purchasing a home. And since you’re purchasing a home there’s really no reason to worry about what the market will do in the future. There’s no reason for any of us to crunch the numbers and estimate what the home will be worth in 3-5 years, because it’s your home. A home isn’t designed to make you money. It’s intended to give you stability once you decide you’re sick of the yearly moves and over the constant battle against increasing rent. Luckily history and the finite nature of the Earth allows real estate to increase a person’s net worth, but I’m saying that shouldn’t be the main priority; at least not for your first home. The very nature of paying your mortgage will ensure you have equity when the time comes to sell. This is about stability.
And that stability in-and-of-itself is priceless.
Then there’s the whole idea of paying yourself instead of a solo landlord or Wall Street REIT and gaining equity strictly by paying down your mortgage. But that discussion is exhausting and has certainly become a cliche at this point.
I’d like to encourage you to think about the place you’ve envisioned in your head and pursue it relentlessly. Not as an investment, but as a home-base, an extension of your personality, a shelter from the world outside and a project to pour your heart and soul into. Buy it because you can see yourself in it and allow yourself to fall in love with it after closing. We could all use a comfortable and safe place in these times and that’s exactly what a home is.