Reprinted Articles

In todays economic situation buying a home will be the largest and best investment most people will ever make. Lots of people correctly believe that owning their own home will create a nest egg and is something to be proud of at the same time. On this side of the Atlantic it does seem largely a British dream as opposed to Germany and France where the people are quite happy to rent a house all their lives. In the current financial climate some people are starting to wonder if this premise will hold true but check out few facts here and you’ll see this is a constant financial fact.

The Property Market has consistently shown appreciation over the years. Real estate has generally appreciated about 5% a year overall. Having 5% down on a 200,000 house is an investment of 10,000. That house would increase about 10,000 to 11,000 for the first year in normal growth years. Earning 10,000 on an investment of 10,000 is equivalent to 100% earnings which would be virtually impossible to do in the stock market unless you were extremely lucky.

Putting 10,000 in to stock market and seeing a 5% gain which would be an average year, you would see 500 profit. In an average year it’s easy to see that the property market is a much better investment and this just compounds over years. Regularly as clockwork there are property booms which virtually double the property market value in the space of a couple of years but these are exceptional rather the the norm. Expect 5% year on year and you’ll not be disappointed.

There are also some lean times in the property market. Your property could possibly go down in value in the short term even if the overall trend over a period of time will ALWAYS be up.

Here’s another example of how the property market is the best and most consistent investment over time. Let’s say a semi detached house was worth 80,000 in 1997. The value of that house today would be in the region of 150,000. Your investment in that house could have been as little as 4,000. If yu had invested that 4,000 in the stock market in 1997 you would now be worth around 7,800. Where would you rather have had your money?

Home values over time tend to increase at a steady pace and can be less volatile as stocks can really shoot up and down. There has never been a time when the housing market has not come back up from the down turn in values. The reason is that the British have a real belief system and the desire to own their own home and will sacrifice and make it happen and this just keeps fueling the market.

By cleverly buying up over the years people can also legitimately avoid Capital Gains Tax which in effect makes the earnings from their property investment tax free!

Now could be a good time to buy a home as there will be some people who will be prepared to reduce their asking price to get the sale they need. Don’t be put off by all the gloomy forecasts around at the moment, the property market will bounce back when the time is right just as surely as the moon will rise tonight. Make sure you get the absolute best mortgage deal you can find. There are lots of different options for mortgages out there and too many people do not take the trouble to look around sufficiently.

Lots more people are now considering debt consolidation mortgages to help straighten out their finances as the current mini-recession takes hold. Significant savings can be made by consolidating higher interest debts in this way and it will be easier to sit tight and wait for the property market to recover.

Last 5 posts by Russell Marsh

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Tags: Home Business