When to buy a home is a question that’s in everyone’s mind when they have saved enough and are ready to buy a home. However since this is an investment, people want to buy a home “at the right time”, to take out the maximum benefits of investing in a home.
So what is the right time to buy a home?
Expert’s opinion may differ. Some may say wait till real estate prices fall 10-15%, some may advice otherwise. But buying a home is a major financial decision of your life, and you should research thoroughly before buying a house.
We elaborate this further:
1. Ask yourself if you really need a house: You may have money to give as down payment to buy a house, but do you really need one? Ask yourself and your family members. Are you living in your parental house? Do you really need to buy a house? Is your employer providing you a good house to live? In that case you may not need to buy a house now. Or may be you are better off renting than buying.
2. Do not predict the real estate market: See point 1. If you really need a home, then go ahead and buy one. There’s no need to predict the real estate market or believe in markets pundits. How many times have they been proved wrong? The only concern you should have is if you can manage your finances.
Moreover real estate prices cannot be predicted. If you wait for the right time, the prices may actually rise 10-15%. Or it may fall 10% and you may still keep waiting thinking the price may fall further, and in no time it may be back to what it was a few months ago or may even rise. There is no end to this and you may keep waiting for the right time which will never come.
3. Do you want to keep your house for a long time? Investment in real estate can give very good returns if kept for a long time. Real estate is like buying gold. So if you have plans to keep the house for at least 5 years you should buy a home.
4. Do a personal check: If you suffer from poor health, or are not good at your job and are hopping jobs every now and then, its better to first set things right in your career and health and then look for a home loan. Remember a home loan repayment is a long time commitment and you do not want to miss out on that. If it happens you may lose your home. You should be absolutely confident about your finances before buying a home. You should be ready for that long time repayment of your home loan.
5. Other expenses: Buying a home inculcates other expenses as well like property and registration taxes, broker’s fee, home designing and furnishing, etc. See if you are comfortable with these extra costs too.
Bottom-line is that if you are able to keep the property for over a long period of time, it’s worth buying a home. Else go rent.