While purchasing a home may have been known as a great way to invest your money in the past, more recently, people are having a harder time justifying buying their own home as a smart financial move. Especially if they’re going to be paying more for the purchasing price and paying a higher interest rate, purchasing a home really needs to be thought through carefully if you’re wanting to have it actually become a good investment decision for you.
To help make the odds more in your favor for this, here are three ways to make buying a home a great investment.
Choose The Right Home Renovations
One good way to properly invest in a home is to buy a home that needs some work so that you can put some sweat equity into it. However, you’ll want to be sure that you’re choosing the right home renovation projects to take on, as not all of them will prove to give you a great return on your financial investment.
If there are things that you can do to the home to make it more energy efficient, like replacing the windows or the doors so that there’s less energy loss in the home or recalculating the heat load of the air conditioner, this is usually a great investment. Additionally, if you can turn an area of the home into more usable space, like the attic or basement, these additional square footage can also help the home be a lot more valuable. And if there are rooms that you’re wanting to do some renovations in, the kitchen and bathrooms are usually going to be your best bet.
Use Your Home As A Rental
Another good option for using your home as an investment is to start using it as a rental.
While renting out the whole property can allow you to get the most money, you don’t have to turn the whole home into a rental to start getting a return on your investment. You could choose to rent out a room, use the space as an event space if you have something appealing on the property, or rent outbuildings for storage. You could also consider renting out parking space on your property if you live close to an area where parking could be an issue.
Leverage Your Home For Other Investments
Once you’ve invested your money into a piece of property, you then have the option to leverage that home for additional money that you can invest in other ways. You can use the credit available to you to purchase another property that you can rent out, you can use that money to renovate the home so it’s worth more when you sell it, or use that money for other investments that interest you. Just make sure you don’t put yourself in a precarious financial position when you do this.
If you want to make buying a new home a good investment decision for you, consider using the tips mentioned above to help you learn how you can do this with your home itself or with the money you’ve already invested in this property.
