Real Estate: Reasons and Priorities for Purchasing Property
By Jody Hudson www.JodyHudson.com
Real Estate can be a great investment with unusual appreciation. We have had
several years years of exceptional annual appreciation.
We are still having great appreciation, perhaps as much as 20% annually in
some areas. But, it is not as extensive nor as much as it was. Real Estate
as an investment can be fairly good to best in the world -- but it is an investment
that is best viewed over the long term; There can be long periods when it does
not go up in value much, if at all. Taken over a period of decades or even
centuries, nothing on earth beats it.
Another problem with real estate is that it is not liquid, that is, it is
not easy to convert to cash -- like stocks, bonds, and savings accounts are.
Real estate is particularly non-liquid during a downturn in our markets. You
will
not likely hear this anywhere else, especially from other Realtors, but real
estate is not a great investment, it is usually a good investment but not always,
and not all the time -- when looked at short term.
Too many people buy real estate as an investment and forget that there are
other reasons to buy. I suggest that you will be much happier if you purchase
real estate for use and for lifestyle rather than as an investment, when it
comes to your place of residence or your second home. Perhaps it should be
almost entirely about lifestyle. After all, a primary residence or a second
home should be a place to enjoy a lifestyle that allows you to relax and wind
down from the rest of life.
If you live a very public life, one where people are always seeking you out,
where you are always in the light of public scrutiny and often in the press
for instance; if your normal life is one where you must always been on your
best behavior and always crafting each word and action for it's best value
- then perhaps a private place, away from others, a place where you don't know
your neighbors, is just right for you. There are some communities that are
unique. There is one just for you!
Perhaps the lifestyle you want is right in the middle of everything. Take
a look at various properties for sale. Each of these properties has it's own
personality of location and lifestyle. Ask your Realtor for lifestyle particulars
about any of them. Most importantly, visit them on your own and find out from
the other residents by meeting them and asking. Weekends are a great time
to walk the area and speak to those working outside!
One of the things I try to convey to people who are at stages in life where
lifestyle is really the only reason to purchase a home -- is to think about
only "lifestyle". Are you really trying to buy an investment that will appreciate
over a period of time so that you can sell it for a profit in the future? Or
are you trying to settle into a lifestyle that will allow you to enjoy your
home and surroundings and other aspects of your life?
Perhaps your other investments are in place, you are seeking a retired life
and you wish to enjoy the lifestyle of a million dollar home, but don't want
to take that money out of liquid investments, that you might need to access.
In such a case, you might want to purchase a home on leased land. The owner
of the land will get the appreciation but you can save, in some cases a million
dollars or more, by getting a home on leased land. In some cases that might
be a mobile home or manufactured home on rented or leased land. In our area
of southern Delaware, most of the people living in land-lease communities do
NOT look at the home here as an investment! They have investments.
Perhaps your perfect lifestyle home will not appreciate in value much or at
all... at least not in the short term. BUT as long as you keep your home in
top shape and are in a desirable community, you are most likely not losing
anything at all. If you are considering a community that involves leased land,
or "ground rent" as some folks call it, then consider what else you may be
getting out of the deal.
Here and in other areas, some land-lease parks or communities allow you to
live life like one of the wealthy without paying for it and without time and
cost of maintainance. You may get benefits such as swimming pools, private
beaches, marinas, tennis courts, grass cutting, trash removal, daily or hourly
security drive-bys, etc. The communities that I know of that are in "fee simple",
that is where you own your own land, do not provide all of these benefits,
(though I do know of many that provide some).
Consider what it is you want out of home or out of a vacation home. If low
maintenance is a priority for you at this point, the manufactured home community
may be the best choice, perhaps. Also, you need to consider how much you are
willing to spend on a vacation home. This will hold a major bearing on what
you will eventually purchase. There are many options for people who are in
your situation. You just need to balance your wants and needs in priority order. Next,
consider your finances. There are many desirable factors in owning each different
type of residential real estate. All we ask, is that for YOUR improved happiness,
please consider Lifestyle instead of only investment appreciation!
Copyright 2004 by Jody Hudson
Other articles by Jody may be found at
http://www.kate-jody.com/essays/index.html
Jody Hudson: MrJodyHudson@earthlink.net and www.Kate-Jody.com
Jody Hudson was raised as a farmer in Delaware. In 1969 he and his father
began "planting houses instead of crops" on the land. It was far more profitable. In
1972 he got a real estate licencse. In a few years he became the youngest
real estate broker in Delaware history. In 1982 he was selected by Who's Who
in American Real Estate as it's youngest member at the time. He has created
about 40 residential communities and sold real estate in Delaware and across
he nation. He has written several valuable articles http://www.kate-jody.com/essays/index.html for
you. Enjoy!
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