What are the Pros and Cons of purchasing a home today? Are you thinking about buying a home right now? Whether you are looking for a primary residence or a second home. Let’s talk about the Pros and Cons
Pros & Cons of Buying a Home (Video)
Pros When Purchsasing a Home in Miami & Key Biscayne, Fl
1. Your wealth can increase as you build equity in your home. Especially in today’s times as the Fed increase interests,and implement quantitative tightening or reducing the money supply in the economy.
Unless you invest in commodities which requires a lot of expertise and cash, real estate should be your most important way to hedge this inflationary or even stagflationary period.
Check how home ownership can be a hedge against the effects of inflation, in following survey:
Today's Appreciation Projected by The Home Price Expectation Survey
As you can see on the following chart, most decades home price appreciation outperforms inflation.
According to HPES, based on the increasing home equity if you were to have purchased a
$360K home is january of 2022, you would see $96,342 in equity after just 5 years. Appreciation
in home value outpaces the cost of rising inflation, and you don’t want to miss out on that equity.
2. Keeping your money in a hard asset, as real estate garantees your money is in something tangible.
The prices in real estate can go up or down during an economical cycle, and the asset is still there. It does not go bankrupt or gets wiped out in the stock market.
It can even generate an income, you can have an investment property and rent the entire property. You can even live on it and build an addition for rental or rent a room that generates income, if necessary.
3. You gain tax advantages. Mortgage interest and property taxes are tax deductible as per IRS code. Having a longterm loan with fixed interest can bring significant savings. While at the same time your asset gets appreciated.
You see today, we are having a period of high inflation everything is costing more & more each day, the same applies to housing.
You do need to speak to your accountant for more specific information, and have him show you the numbers.
4. According to Corelogic, rents have gone up in the entire country.
Now, Miami and the Key Biscayne area had the highest year-over-year rent increase last Febraury, 2022 with a 39.5% increase.
Today, it is cheaper to own than to rent.
5. You can stabilize your payments. Monthly payments are relatively steady if your loan has a fixed interest rate, while your landlord can increase your rent.
6. You’ll have a secure place for your family to live and grow. You can also decorate and expand your home in a way that you like to create your dream home.
7. Gain a sense of community. Homeowners often are more involved in the well-being of their communities.
Key Biscayne, for example, is a very small Municipality with plenty of room for those who’d like to get involve. In addition, the community center has so many activities that you can participate, that it is very easy to meet your neighbors, feel welcomed and part of the Key Rat family.
Cons when Purchasing a Home in Miami & Key Biscayne, Fl
1. You need to think about maintenance costs. It takes work and money to keep a home in good condition. It’s like your car, if you don’t change the oil, the car can blow up.
It important to buy a property knowing you can afford the costs involved. And knowing that you have enough savings to keep paying your loan in case you’d loose your job.
During these periods of weaker economy and uncertainty, consider both members of the household to keep an active job.
2. It ties up your cash. Selling a house may not be possible during the first few years of ownership.
If you sell your house too soon you will loose money. You will have to pay penalties. You just did not the let the property gain enough equity.
Today’s market is at high peak, it is a market for longterm investment.
3. Your home can fluctuate in value. Key Biscayne and Miami are cyclical markets. These market experiment a stronger price gap when the markets change.
When you purchase, you must understand the market. Be prepared to hold on when the cycle goes against the value you purchased your home at. Real estate is affected by demand and supply, therefore price fluctuation is part of owning a property.
Nontheless, the data I supply can help you understand when is the best time for you to sell or hold on.
You see, right now we all know there is a recession ahead of us, therefore, your property in 2-/+ years might loose value. But once the recession is overcomed your property value will increase exponentially.
4. Moving is more difficult and complicated, you may not have as much flexibility in choosing a new job location.
5. Loan payment obligates your finances. When you finance a home, you are obligated to make that monthly payment no matter what.
I always suggest a potential buyer to purchase within a framework that would not compromise their quality of life, so it’s always a good idea to have a bit of a nest egg as a backup for a rainy day.
So there you go. Now let’s be real, buying a home is always a scary decision. This is why I am here Call me at WhyKeyBiscayne and let me guide you. I’ll take out all the worries and pressure, and keep you informed with real micro and macro data, so that you can make an informed decision.
Do not forget! “Much of our successes get lost for the lack of a little more”. Again, this is Beatrice Ponce at WhyKeyBiscayne.com
Source: Corelogic.com
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