I’ve been emphasizing the fact that buying a house is better than renting one. In the article, Rent or Buy: A Guide to Finding the Right Home, the advantages, and disadvantages of the two options were explained but in my opinion buying a house is a better option.
However, you want to make a better judgment when considering buying a house.Hence, the following are reasons to back my claims that buying a house is a good investment.
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Sometimes real estate prices increase adequately for people to make money
As in the present economic recession of Nigeria, the price tag on houses is higher although the demand is reduced. This is a good avenue for real estate investors/builders in the country to make more money.
House is something you can see (tangible) and people like tangible investments
I think this is self-explanatory. But let me add that investors are more likely to succumb to tangible investments like real estate than intangible investments.
Getting Value
people think they are getting enough value by living in a house, and anything they ‘make’ while selling it is an added bonus.
Benefits from real estate transaction
Various parties benefit every time you buy and sell a house – real estate agent, attorney, bank: hence they want you to buy and sell as often as possible.
However, the following factors determine when buying a house is a good investment:
The price you paid for the house
You won’t agree that purchasing a highly priced house is a good investment especially when the building is of inferior quality.
ALSO READ: Fulfilled Prophecy: Number of Vacant Houses Increase in Lekki & Ikoyi
The rent you would have paid for the house if you rented it instead of buying it.
If the projected amount you would have paid as rent over a substantial period of time is less than the price of the house, you can conclude it’s a good investment.
Additional expenses that you pay, do not ignore them.
Since the price of a house is exclusive, there are hidden costs you may be overlooking but will have to settle sooner or later. Hence, the amount of such hidden cost determines how good a house purchase investment is.
ALSO READ: 5 Best Ways to Get a Cheap Piece of Land in Lagos
The price at which you will be able to sell the house
From the seller’s perspective: economic conditions determine how much houses are sold just as in the case of Nigeria’s economic recession, developers are forced to sell at lower prices in other to recover the demand being stolen by the recession.
ALSO READ: Are Properties in Nigeria Cheaper During the Recession?
The transaction costs involved: buying and selling is not easy
Don’t forget the following people would need to be paid for the services rendered: real estate agent, attorney, bank offering mortgage etc.
Therefore, you would have to weigh the pros and cons of buying and selling a house to determine whether it’s really a worthy investment.
