Investing in a Home: An Exciting and Future-Forward Opportunity

For millions of people worldwide, a stable financial future depends on making good investments. Investing allows your money to work for you, generating income outside of a career. 

Investing in a home is a major decision because of the high price of real estate across North America. While most people will invest in residential real estate for themselves or their family, an investment home is typically considered a second property one purchases purely for financial reasons. The investor will pay the down payment and the mortgage, earning equity in the home in the hopes of one day selling the property at an increase or using it to generate income. 

A real estate investment differs from a standard investment in stocks or bonds; buyers can make more decisions when investing in real estate, including whether to rent it out or renovate the property to increase its resale price. These decisions can directly impact the value of the investment, and real estate is typically considered a relatively hands-on investment strategy.

There are plenty of ways to try to generate income through investments. Turn on the TV, and you’ll see commercials for cryptocurrency exchanges, wealth managers, and investment apps. So, in a world of opportunity, what makes real estate a sound investment strategy? Let’s look at some of the core benefits of investing in a home.

Real estate investors have the unique ability to profit off not just the sale of the asset but also the usage of it. When investors purchase a property, there will be significant up-front costs, including the down payment and mortgage. But there will also be the opportunity to generate income from the property. Investors can rent out the property, either platforms such as Airbnb or directly to a tenant, and receive payments that can cover or even exceed the costs of the mortgage. They can start passively earning a profit by renting and still cash out when they decide to sell the real estate.

Real estate is a tricky investment for some people because it is a long-term, sustained investment that requires investors to keep making payments. But many buyers are willing to sign on for this because of the relative safety of real estate investing. While there are crashes and market shifts, real estate generally increases in value over time. And real estate marks an excellent way to diversify from the stock market, so if there is a major recession, your money is more spread out. There are also tax benefits to investing in real estate. Investors can write off expenses, including mortgage interest, insurance, and property taxes. 

There is a common refrain in investment about buying low and selling high. In the world of real estate investment, many take that very seriously. They invest in cheap property that has fallen into disrepair, invest even more time and labor into fixing the property through renovations and refinishing, and then flip that property for a higher price that exceeds the cost of the initial and additional investments. Many real estate investors implement sweeping changes to the homes they purchase to elevate the value and net themselves a tidy long-term profit.