When purchasing your first home, or even subsequent homes, it’s tempting to buy the nicest, biggest house your budget can afford. A house you can grow into and raise your kids in for years to come. However, if you want to invest in real estate, the most affordable way to do that is buying a home as a primary residence (more on this in a later post). So when you purchase a home, making sure the home fits your current needs, along with the needs of the near future (1-2 years) is important, but being cautious of A. Your spending B. rentability and C. being motivated to move into another house sooner than later, is important.
Too often in life we are swayed to do things, or not to do things, based on what other people say. Of course there is a time and a place to look to people we know, love, and trust for advice… but sometimes, even these people can’t know what’s right for you.
An example from our personal lives took place when we purchased our second home, that was smaller than our first home, we decided to keep our first house as a rental. We had numerous people who we looked up to tell us that we should just sell our first house, then use the equity to buy one bigger house. We were determined to keep the first property to rent it out and did just that. We continued to get this advice (as well as other reasons to not purchase) on each and every property we bought, but we stayed on course with our long term plan. It would have been easy to sell and get a nicer home. However, we always had a detailed, thought out, business plan. This plan helped us see past immediate wants and needs and allowed us to stay focused on our end goal.