Buy and Hold.
Cliché at best, downright dangerous as an investment idea.
The truth is usually somewhere in between.
We all need a roof over our head, but at what price?
Many of us have been brain washed by a government that operates above the law. The herd mentality is alive and well, so buying into school districts with perceived value should continue as part of the decision making process.
As individuals, we can’t print money, and must pay our taxes. That dichotomy makes it difficult for today’s generation of new workers to confront the real reality of “The True Value” of an asset class.
Dollars are yesterday’s pennies.
Things can change quickly in our lives, and no one has a crystal ball.
Prepare for the unknown, and you are miles and years ahead of the average homebuyer who is seeking the instant gratification of granite counters and fabulous, luxurious bath rooms.
Admittedly, I have become more conservative as I have aged.
As a prospective home buyer, at least come up with your game plan before venturing down the emotional journey of real estate.
- Decide the right location for your family
- Get pre-qualified by a reputable mortgage broker
- Determine to purchase a maximum of 95% of that value. Leave a cushion for personal property and rainy day fund.
- Guesstimate the time you will live in this home. Generally, if you are not going to be there at least three to five years, it probably doesn’t even make sense to buy.
- The growth spurt as children get older causes a temporary need for a bit more space. That typically wanes quickly as children leave the nest for college.
Today’s dynamics have changed, and while we can’t plan for all of the possibilities, a clear trend has emerged: Families are becoming more communal once again.
- Children move back into the nest when they are unemployed or can’t afford to buy
- Leaving home may not be an option for children who attend community colleges
- Parents and grandparents may move in with children who are doing better than they are
Whatever the demographics, it is sometimes advantageous to consider the possibility of future expansion in an existing home if it can be accomplished at a reasonable expense.
Normally, that means stay within the existing structure and finish off a basement or an attic space.
Finding a real estate agent who will honestly help you evaluate your options is the first step. If their motivation is merely commission driven, keep looking.
I am a real estate broker, but I try to remain unbiased.
“Know thyself” has never been a more relevant philosophy.