Owner-occupied real property now and in the future
Your owner-occupied real estate, now and in the future, is one of the best long-term investments one can make. Time has shown that owner-occupied real estate can yield huge benefits in the long run. In some areas of the country, the tremendous returns have been even short-term. In some cases, owners have sold homes that were 30 or 40 years old for 30 to 40 times their original cost.
The least expensive maintenance cost is owner-occupied investment property, simply because most homeowners fix problems as they arise.
The hardest part of investing in real estate is knowing when prices are inflated or low. To understand this, you either have to do a lot of research or endure a lot of pain until prices stabilize. Residential real estate as an investment requires skill, intelligence, research, intuition, a lot of time, hard work, and luck.
These are the items to look for before and during your owner-occupied real estate now and in your future home search, for successful ownership.
good credit score
Before starting to look for a house, the first steps are;
Get a copy of your credit report
Please review it closely, make sure all credit listed belongs to you
If you find a credit that does not belong to you, write Experian.com and challenge reporting with them.
Stop charging and start paying the credit you already have
Pay everything that is due and keep your bills monthly
Don’t get a loan until your credit is cleaned up to the best of your ability, this can take anywhere from months to a few years. Save for a down payment or get a loan with no down payment and pay more points (or a higher interest rate). Research any mortgage company you plan to use and make sure they are legitimate.
If this is your first time buying a home, consider FHA or NACA loans (naca.com) to help with the qualification process. Each city has a first-time homebuyer organization in town to help with the homebuying process.
Quality House – Well Inspected
Make sure you get a quality home by getting quality inspections from plumbers, electricians, HVAC, and carpenters. There are many home buying nightmares where buyers turned to a lone home inspector who overlooked most, if not all, of the issues. If you find problems during an inspection, you know what you’re dealing with. You can: 1. Find another house, or 2. Request a price reduction so that the problem is solved by increasing your loan amount.
Home purchased at the bottom or middle of a market
Know if your home buying market is in a bubble or if your home is overpriced. If so, you may not be able to sell the house for several years, even if you have to move.
An affordable price is a house that fits your budget and is usually around 30% of your gross income. Create a sustainable “overall budget” before you buy.
Look for signs that the home has been well-maintained. Take a good look at heating and air conditioning units, the roof should withstand the test of a heavy water hose. The floor should be level when you put a marble on the floor, it should not roll, if it rolls you may have a serious foundation problem.
Value Increases Over Time: The more jobs or tourism in the area, the more valuable the area may be in terms of home value growth over time. Then an area without jobs or tourism can be transformed in several years when something valuable is added. As well as places that are sinking due to a decline in an area that has no jobs or services. It is best to look for an area with amenities at the time of the sale.
No monthly house or rent payment
After the mortgage is paid off, you will not have to pay any house notes or rent. This is a great saving. But, you will still have maintenance and taxes. It is important to consider taxes as you get older. Will your retirement check be enough for taxes and home maintenance?
The advantages and disadvantages of owner-occupied real estate are listed below:
The main advantages of owner-occupied real estate are:
• You may qualify for the lowest interest rate home loans available.
• You may qualify for a low down payment consideration of 5% to 10%. There are also extra low down payment loans for qualified first-time buyers with as low as 3% down.
• Qualify for a full range of owner-occupied home tax deductions. IRS Homebuyer Credit
• Most owner-occupied homeowners take pride and enjoyment in maintaining their own home, so long-term maintenance is usually reasonable.
• The returns from owner-occupied real estate have been tremendous when held for the long term.
• There is a capital gains exclusion for taxes of up to $250,000 if you have lived in the home for 2 out of 5 years.
Key Disadvantages of Owner-Occupied Real Estate:
• The debt that one has when a home is leveraged with a mortgage loan.
• The responsibility of maintenance, for some this is an advantage, since they enjoy maintenance.
• You are responsible for taxes.
Your owner-occupied real estate, now and in the future, has many more advantages than disadvantages.