Many people are excited about buying a home right now. This, of course, makes sense. Prices are low, and so are mortgage rates. This means that you can get a good deal on a home, and pay less in interes. However, before you pull the trigger, you need to consider whether buying a home is right for you right now.
There are a number of things to consider as you decide whether or not to buy a home. One of them is determine how long you are likely to stay in the home. Some hope that if they buy now, they will be able to turnaround in a year or two and sell as the housing market begins to recover. However, this is taking a chance, since there are some economists don’t believe the housing market will start to recover until 2014. If you know you will move before then, you will probably be lucky to break even — unless you are fortunate enough to get a real steal on a foreclosure or a home in disrepair (as long as you can do most of the fixing up.
Your Home: Income Property or Residence?
As you decide whether or not you can afford a home, you also need to consider what the property will be used for. If you plan to use it as a residence, then it really does matter that you try to stay in your home for a little bit longer — perhaps even five to seven years at least. If, however, you think that you will use it as an income property, renting it out, how long you plan to live in it doesn’t matter so much. There are people who buy a home at a great price, knowing that they will move in a couple of years. They rent out the home to someone else, getting someone else to pay the mortgage (in the form of rent) until the housing market recovers and they can sell. (Whether or not you are cut out to be a landlord, and concerns about what tenants do to the house, are another story.)
How long you plan to be in your home makes a difference. If you view a residential home as an investment, then you will need to be there long term — or be very good at flipping houses. Otherwise, it might be time to view the home as a large purchase, and plan to stay awhile.