A Home Of Your Own - 8 Reasons To Buy (#2 of 8)

Last week I started an 8 part series on why you should consider buying a home.  This week, I continue with the number 2 reason to buy a home.  Keep reading to find out why!

Appreciation

I know this seems like a fallacy because our current economy tells us so, but real estate really does appreciate.  Appreciation is the increase in value of a property over time due to inflation, supply and demand, capital improvements and other factors.  The truth is, real estate is cyclical, sometimes moving up and sometimes moving down, but over the years consistently appreciating. Appreciation of property value over time is due to inflation, which is caused by an increase in the amount of money in circulation.  The value of money declines when the supply of money increases and the end result is increased retail prices.  The cost of everything goes up, including land prices, construction materials, labor costs , building permits and fees, etc, which makes it more costly to replace an existing property.  Of course, these things don't guarantee increased property value of a home or investment.  Other factors include the general decline of an area, reduced demand, an increase in crime, poor upkeep, etc.

Keep in mind also that the value of real estate can also be increased by making cost-effective improvements such as a new roof, an addition, siding, landscaping, paint, etc.  Some improvements, dollar for dollar, will result in a greater increase in value than others.  You should plan carefully and make improvements that result in the highest level of appreciation for the dollars that you spend.  Remember though, that if you make too many costly improvements, you might not recover those costs when you sell.

Are you ready to buy a home yet?  If so, contact me!  If not, keep on the lookout for reasons 3 through 8 on why you should buy!

Stayed tuned for 8 Reasons To Buy # 3 – Mortgage Interest Deductions