subject: Short Term Home Ownership Facts You Need To Know [print this page] If you're just entering the real estate market, it can be confusing trying to determine which home buying strategy to follow. While it's common to hear real estate professionals recommend buying a home only if you plan to live there for the next 4 to 5 years, it's important to consider the downside of waiting to purchase a property. Sure, if your home doesn't increase much in value when it comes time to sell, you might lose money by not being able to recoup your initial closing costs and commissions.
However, let's consider the consequences of postponing the purchase of a home. By waiting, you're missing out on valuable money saving tax deductions each year. The real estate market can also take off driving home prices and loan rates beyond your reach. Over time, you could lose out on thousands of dollars in lost equity. While there are financial risks to buying a home short term, the potential loss of thousands in equity far outweigh the risks.
If your future plans include moving within a few years, your best strategy would be to develop a short term home buying strategy. Homebuyers who've taken advantage of short term ownership have reaped substantial financial gains in the relatively short time. The point to remember is, there's never a bad time to purchase real estate. Irrespective of the local market conditions and interest rates, there are always homebuyers who can churn a profit in any market.
Some home buyers are wise enough to profit from homes in need of repair. If you possess fundamental remodeling skills or at least willing to learn some basic skills, you can remodel and redecorate a property to earn thousands of dollars in increased equity when it comes time to sell.
Locating and renovating homes in need of repair isn't the only effective way to reap substantial profits from the real estate market. You can turn a profit just from purchasing properties at bargain prices. Motivated Sellers, foreclosures, homes in probate, real estate owned (REOs) properties from banks who've repossessed homes from borrowers who've defaulted on their payments-all make great home buying opportunities.
Another effective technique to help you profit from short term ownership is utilizing lease options. By zeroing in on real estate and properties for rent with options to buy, you get the benefit of building positive credit, accruing a reserve of cash via rent credits to put towards a down payment, and the ability to get a seller to commit to a future predetermined sales price.
One important feature of lease options overlooked by many homebuyers is the ability to not exercise their purchase option should the real estate market spiral upward-but find another interested homebuyer to pay them for the option. The new buyer would reap the benefits of any accrued rent credits and have the chance to buy a home below existing market price.
