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Buying your Dream House in 5 Steps

Finding your dream home is a lot like finding the perfect partner. It might take a while, but when you find the right one, you know. When you find your dream home, you’ll always have the perfect place to unwind and make memories.

Thankfully, finding the perfect home is a lot easier than finding the perfect partner. A bit of planning and some legwork can get you into the home that fits you. Here are some pointers to help you find the house of your dreams.

Find Your style

You’ll be happiest if you consider what type of home works best for you. Some people prefer living in bungalows, others prefer duplexes. Some people like large houses while others prefer more intimate surroundings.

Plan for the future

When you’re ready to look for a house, consider what works best for you now — and what will work best for you in the future. Ideally, you should plan on staying in your new home for the next five to seven years. If you’re planning on having kids, you may need an extra bedroom or two. Think you might start working remotely? You’ll want that home office. While you don’t want to overdo it and buy a five-bedroom home when you’re single, be sure to give yourself some room to grow.

Do Your Homework

To find your perfect fit, start by doing some research. Spending a few days driving or walking around several areas can give you a real feel for the place you might call home one day.

Once you think you’ve found a home you want to make an offer on, take a second look. Both a home and a neighborhood can look completely different at different times of the day. For example, you might have viewed a home on a weekday morning when all was quiet only to find the neighborhood is too loud at night.

Count the costs

Tally the funds you have available for payment of the purchase price and other closing costs such as legal fees, agency fees and fees customarily charged by estate associations and families/communities.

Stay on Budget

It can be tempting to start looking for homes at the top of your price range, but that doesn’t always make sense. If possible, avoid getting into debt in order to buy a home. But if you have to, your monthly housing expenses should not exceed 28% of your total monthly income,

No house starts out perfect

Look for a well-built home that has the space you need, some features you love, a layout that serves your lifestyle and a price point that allows you to make some changes. With a little TLC, this will be the home you will grow to love.

Stay flexible, be willing to compromise, and you’ll be sure to find your dream home.

Evaluating Real Estate as an Investment Class Pt 2

The major benefits of investing in real estate include the following

  • Tax-deferred compounding of value: In real estate investing, the value of your properties appreciates at compound interest, while tax payment is deferred during your years of ownership. You don’t pay tax on this profit until you sell your property, and even then you can roll over your gain into another investment property and avoid paying taxes.
  •  Regular cash flow: If you have property that you rent out, you have money coming in every month in the form of rents. Some properties, particularly larger multiunit complexes, may have some additional sources, such as from facilities management fees.  When you own investment real estate, you should also expect to incur expenses that include your mortgage payment, property taxes, insurance, and maintenance. The interaction of the revenues coming in and the expenses going out is what tells you whether you realize positive operating profit each month.
  •  Reduced income tax bills: For income tax purposes, you also get to claim an expense that isn’t really an out-of-pocket cost — depreciation. Depreciation enables you to reduce your current income tax bill and hence increase your cash flow from a property.
  • Rate of increase of rental income versus overall expenses: Over time, your operating profit, which is subject to ordinary income tax, should rise as you increase your rental prices faster than the rate of increase for your property’s overall expenses. What follows is a simple example to show why even modest rental increases are magnified into larger operating profits and healthy returns on investment over time.

Evaluating Real Estate as an Investment

When Charles first entered the real estate field while attending university decades ago, his father, a prominent real estate investor, advised that he use his monthly income primarily to pay day-to-day living expenses and allocate money each month into long-term financial investments like real estate. This solid advice has served Charles well over the years.

For many people, a comprehensive wealth-building strategy can help with the challenges of funding future education for children and ensuring a comfortable retirement. However, this requires a lot of planning and discipline, especially where you intend to invest in real estate. Contacting an investment company and purchasing some shares of your favorite mutual fund or stock is a lot easier than acquiring your first rental property, but with a financial and real estate investment plan, a lot of patience, and the willingness to do some hard work, you should earn more profits on a well chosen real estate portfolio.

Compared with most other investments, good real estate can excel at producing current income for property owners. So in addition to the longer-term appreciation potential, you can also earn income year in and year out. Real estate is a true growth and income investment.

The stock market is a relatively liquid market where buyers and sellers can enter or leave the market quickly with broad knowledge of current pricing. In contrast, real estate assets are illiquid — it can take a relatively long time to enter or leave the real estate market. It can also be tricky to identify the right time and price to enter the market.

Real estate is also unique: A share of your favorite stock always represents the same investment; not so with real estate. This creates the opportunity to profit from pricing inefficiencies between one property and another. Also, the ability to complete a real estate transaction quickly provides an additional factor that can affect the price.

Clearly, a major reason that many people invest in real estate is for the healthy total returns (which include ongoing profits and the appreciation of the property). Real estate generates robust long-term returns because, like stocks and small business, it’s an ownership investment. By that, we mean that real estate is an asset that has the ability to produce income and profits

In the next part of this series, we will discuss the major benefits of investing in real estate. Keep an eye on this space.

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