Buying Your First Home

Just about everyone has thought, at one point or another, “I’d love to own a home.” But beyond the idea of having a house that is yours alone, investing in real estate is a one-of-a-kind opportunity: it’s a chance to control a large, valuable asset by paying a small lump sum up front as a down payment.

For instance, it’s common to be able to buy your first apartment for about $100,000 just by putting $15,000 on the table and taking out a loan for the remainder. Not only that, but real estate is a relatively safe investment. While property prices drop during economic downturns, they don’t plummet irreversibly like stocks can.

For example, according to the S&P/Case Shiller Home Price Index, in 2013, the average appreciation in value of American homes in the time since they were purchased was 12 percent.

So, it makes good financial sense to buy a home – but it also has a psychological impact. After all, if you’re a lifelong renter, you know that having a temporary living situation can prevent you from investing in nice furniture or taking the time to decorate your place. So, you leave the walls white and that smelly carpet is there to stay.

But when you move into your own place, everything changes – you suddenly feel an urge to personalize every detail.

Another plus of home ownership is that having no landlord means you don’t have to wait for someone else to fix your leaky pipes. You also don’t have to fear rent hikes and the threat of eviction; all that stress just falls away.

But even with all those upsides, people always find excuses to avoid home ownership, and it’s important to overcome them. For instance, you might think, “I have such a good deal at my place right now.” Sure, your rent might be cheap, but buying your own home means that it will, at least eventually, belong to you.

In other words, your rent might be low, but would you rather it was cheap or free? Because free is what it’ll be when you’re the owner.