Unless you like camping full-time, you need a home to live in. It is one of those essential life requirements where you keep all your possessions and family secure in a familiar location and is the hub of your existence.
Do you rent or own your house? Either way, you have to pay lots of money over an extended period, giving you the right to call it your home. Even with the ebb and flow of the real estate market, prices still tend to increase yearly, and you would think that some folks would give up the dream of home ownership. What is happening, though, is the opposite.
Put yourself into the mindset of a buyer. Think, “why do we buy houses?” Understanding the psychology will enlighten you on the decision-making process. Let’s learn why people are purchasing houses.
You Have a Home Base
When you rent a house, there is only so much you can do to it. You are not the owner, which means even changing the paint colours requires you to get approval from the landlord. It is hard to make it your own and take pride in it, but that all changes when you buy a house.
You feel a sense of security and stability when you are the owner. You develop pride of ownership and set roots for you and your family where they all know this is theirs. Why throw money away paying rent when you can pay yourself and own something to call home?
Investments
Everyone wants to increase their net worth, and while making wages at a job gives you the cash to invest, real estate is among the most profitable assets you will own.
Real estate traditionally goes up over time, and while there may be fluctuations in the market, it is a wise and sound investment. People recognize this and want to ride the wave like others are, and over time, you gain equity that can be leveraged to buy other things.
As you get older and prepare for retirement, you need to bring down your monthly living costs, and by buying a house and paying it off, your residential costs go way down. You still need to pay for property taxes and insurance, but you won’t have any rent payments or mortgage to worry about.
Business Ventures
Many properties across the country badly need repair, and it is an opportunity for a handyperson to buy and fix them. This is typically known as flipping and can be very lucrative if you know how to spend a little money on key improvements.
Beyond flipping, you can also buy houses to rent out and create a steady stream of passive income. This can quickly snowball by providing more cash to keep buying, and before you know it, you have a large rental portfolio.
Good Neighbourhoods
We all want to live in peaceful surroundings, so people seek locations catering to their lifestyles. This includes amenities like:
- Parks
- Good schools
- Restaurants
- Shopping
- Highway access
- Entertainment
You can’t always find rental properties in desirable areas, and even if you do, renting is no guarantee of long-term stability. Many people buy houses where they want to raise their kids and are close to their jobs, so it is better for the entire household.
You also want to feel safe and live beside like-minded folks in the same family position as you are with kids. Being in the right neighbourhood drives people to buy.
Keeping Up With Others
It can be tough to watch friends’ achievements, and home ownership usually drives that success. As you get older and start a family, you interact with others your age and hear about them buying homes and being able to renovate, decorate and build equity. You don’t want to be left behind, so it spurs you to buy a house for yourself.
This could be your main residence or even a vacation home, but regardless of the use, you are following the path of others in your peer group, which is a good feeling.
Savings
This may be the biggest driver of wanting to buy a home, and while the initial down payment can be tough to come up with, you will have regular payments that work towards becoming mortgage-free.
With a rental house, you can be sure of one thing: the rent will increase over time. With home ownership, the opposite happens. As you pay down your home, each term requires less money borrowed, and if you can negotiate a better interest rate, the payments decrease. These savings can fund other things in your life or be used to make lump payments on the mortgage to reduce the debt even further.
This is why people are buying houses, and if they are not homeowners, it’s time to jump into the market. Then, you can enjoy the benefits of home ownership in all its glory.
