Most people dream of owning their own home someday. But you should buy for the right reason. You shouldn’t buy a home simply because you feel it’s what you’re “supposed” to do at this point in your life.
Remember, there can be significant financial consequences.
For one, if you overspend, you can be reduced to being a house poor person, with not enough leftover to pay regular bills or work towards long-term financial goals.
Here are some guidelines on why you should and should not buy a home.
When to own a property…
1. When you’re ready
Buying a home is probably one of the biggest decisions you’ll make in your life. So it makes sense to be financially prepared before you take the plunge.
Bear in mind that this decision is a long-term financial responsibility as you have to service the housing loan on a monthly basis.
If you’re financially and emotionally ready, go for it. For some, owning a home is a milestone as it gives you a sense of security as well as a sense of personal accomplishment.
2. When you want to own equity
The satisfaction from owning a home comes from knowing that you now own equity. Instead of paying a monthly rental, you are paying towards your own home.
In the event you wish to sell the home, you are then able to recoup some of this money to put toward your next home or another big purchase.
Keep in mind that the housing market can be unpredictable, so there is no guarantee that your house will significantly increase in value. One good example is the Covid-19 pandemic. However, real estate is an appreciating asset in most cases.
If you are lucky enough to pay off your home, you can sell it and collect a large sum of money. You can then take that money and use it for your retirement or use the equity to help you move to a nicer home.
3. When you have a stable job
If you are reasonably secure and certain that you will stay in your current job, it is a good idea to put money down on a home.
Having a steady income will help you stick to your budget, pay your mortgage and spend within your means.
4. When you know house prices will rise over time
A house is one of the best investments you can make. Home prices in Malaysia are relatively stable, with the exception of crises like the current pandemic.
However, experts believe it will slowly pick up when everything normalises. So if you buy a home now, you’ve put your capital in a safe investment where it is likely to appreciate.
Experts believe that house prices will pick up again when everything is back to normal.
5. When you crave stability in your life
Everyone gets to the point where they want stability in their lives. Owning your own home gives you a sense of neighbourhood, schools and community and other amenities that you can call your own.
Continue reading "5 Reasons NOT to Buy Property" here.
This article was originally written by Sharina Ahmad of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.