“I’ve never bought a home. Should I look at my first home as an investment?”
This question came up recently at my Fox Valley Investors Group MeetUp. (details: Fox Valley Investors ) . Our group is open to everyone and we get folks of all experience levels, backgrounds and ages when we do our on-site property evaluations. It was great how this person took the first step into a broader world of real estate by coming out to the property evaluation, and didn’t have any expectations about investing in property.
I took the liberty of explaining how a personal home is not the same as an investment property. Everyone needs a roof over their head, but a property investor has a few extra. The difference between investing and home ownership is huge. Here’s my take:
99 problems plus your own home
A homeowner has one roof, one furnace, one set of pipes and one water heater to worry about. An investor typically has their own home plus several others on their worry list. Investors inherit new problems from other locations such as running background checks, deciding on lease terms, fixing broken furnaces in winter, leaky roofs, calls in the middle of the night on plumbing and weekends, too. Working a regular 40 hour/week job? Consider how you’ll handle those extra fixes and issues on your nights and weekends year round.
“But I love this house!” said no investor ever.
Investors don’t love their investments, they love with the profits and checks that come along with a successful business. Falling in love with a house is not good for business and can undermine a sound business plan. However, falling in love with a house and envisioning cozy family holidays, Super Bowl parties with friends, a big garden, relaxing nights or a remodeled kitchen, are the exact right reasons to make a purchase to enjoy for years to come.
X marks the spot
Homeowners live in their homes to enjoy them, to maintain them, and to do with as they please. They might want a home close to work, by a nature preserve, something without stairs, or with a huge back yard. Their personal preferences trump the investor card every time. That’s important because building your life in a new home can be a great perk of home ownership. Often people move to a single family home after years of renting and paying a landlord. The freedom to own your walls, ceiling, garage and basement without needing to share it can be alluring. I’ve had new homeowners so excited to have a laundry room that they install the washer and dryer before unpacking a single box on Day One! And if you’re ready to paint the walls in Fired Up Orange, now you can go for it!
Make it personal
Knowing the difference between a detached, professional business approach to buying an investment and falling in love with a white picket fence is important to understanding your first home purchase.
So go and search out those dream homes on the internet. It’s an adventure to boldly walk through a front door of a house for sale to see if it is right for you! Will it be as great in person as it looked online? Maybe. But one thing is for certain: your first home will be a great “investment”. Absolutely, yes! As long as you’re loving the roof over your head and the lifestyle it offers, you’ll be ahead every time you pay the mortgage.
So, what’s your motivation for buying a home? Interested in investing in properties? Have you tried a house hack like buying a fixer upper to live in as you fix it? Find out if a house hack is right for you! Attend our next meet up and learn from the local property pro’s. Join us here: Fox Valley Investors
Free Property Report
Property markets change every 90 days! But folks sell homes all year long. Take the first step and get a free market report by going here:
Free Property Report