Envision the property(ies) you would like to own 5, 10, or 15 years from now.
As real estate prices throughout North America(and throughout the world) have skyrocketed during the past five years, many potential first-time buyers and investors feel frustrated. They hesitate to buy and invest. But if you hesitate, you will only lag further behind.
Renters: Make Ownership Your First Priority
Your best chance today to own the home you would like in, say, 5 or 10 years is to first become a property owner as quickly as possible. Weigh carefully the advantages of buying a property that makes you some quick cash (rental income, fixer-upper, bargain-priced foreclosure).
Do not complain that prices have gone through the roof (remember, push aside the self-denying, goal-defeating self-talk). Instead, create a financial plan that places you on the fast track to the property(ies) you really want.
Gain a Great Tax Break
Since 1998, tax law has permitted homeowners to sell their homes every two years and pocket their profits tax free (up to $250,000 for singles and $500,000 for married couples). This tax break means that you can buy a bargain-priced fixer-upper, renovate as you live in it, and then sell for a profit (the economy willing) in two years; then repeat as necessary or desired.
Want to earn an extra $100,000 to $250,000 (more or less) in tax-free gains during the next four to six years? Weigh buy, renovate, and resell fixer-upper properties.
Summing Up: You Control Your Buying/Investing Power—Not the Lender
The “tell you exactly how much you can afford” approach to “preapproval” gives a snapshot photo of your property buying power—but only with that lender’s camera. Instead, think of your life as a moving picture. You not only star in this movie, you write the script, direct, edit, and determine the ending. Do you want to own your own home? Do you want to own investment properties? Do you want to structure the best way to finance your acquisitions? Would you like to seriously improve your net worth? Would you like to live free of destructive debt? Would you like to achieve financial independence? Yes. Then start now. It’s your movie. It’s your move.
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