Thursday, October 1, 2009

Investing in your own home

Having a place you can call your own is one of life's great accomplishments. It is also one of the best investments you could have and for most people, their largest investment. Whether its a condo, townhouse or a single family house, possessing our own shelter should be an investor's primary investment goal. There are so many reasons why we need to aim for this. First, rent money is dead money. You pay the landlord and poof, money is gone. Whereas mortgage payments increase the equity in your property, thereby increasing the value of your investment. Next, there is a powerful psychological boost that comes with being a homeowner and this will radiate in your workplace, in your business and your life in general. Real estate prices go up in value over time. My parents invested P200,000 for a 3 bedroom house 20 years ago. A family friend recently offered 3 million pesos for it. Doubling your money every 5 years is not a bad investment, isn't it? What is very good about investing in your own home is that financial institutions are happy to lend you money to do it. Try asking for a bank loan to purchase stocks and bonds and you could get a "Is this guy crazy?" look from the loan officer. But they are all smiles when you ask for a housing loan.

I also know someone who has moved more than 20 times in a span of 8 years. He is not a wanted criminal, he just happens to be very good in selling his own home. He has pockets at least P300,000 each time he sells his place of residence. You may not want the hassle of moving that frequently but still, there's money in it. There are so many more reasons why it is a must to invest in our own home. Invest in a dwelling you can afford, it could be a good sized house and lot far from the city or a small townhouse closer to the city or a studio pad right smack in the CBD. What is important is setting your goal of having your very own place. Once you have enough savings for a downpayment; there are many options for financing your home purchase, there are banks, Pag-ibig fund and in-house financing from developers. Now let's go house shopping.

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