Is property an investment? And what about your own home?

Is property an investment? And what about your own home? Today we will talk a little about the war that has raged for generations: is owning a home an investment?

First of all, there is no right or wrong – each case is completely particular and unique. I say this because, despite the interest rate having an absurd impact on the final amount paid for the property, the appreciation can often make it worth it, added to the possibility of renting it.

The first point we need to bring to the discussion is: a property is immovable.

Yes, but when it comes to investing, if they told you that what you were buying could NEVER move, would you still buy it? It’s a reflection.

Changes in the neighborhood, bus stops, schools or hospitals directly affect the value of a property.

Is property an investment? And what about your own home? The advantages of investing in real estate

The first advantage is the same reason as the disadvantage: it’s solid, it’s fixed, and it won’t move. This is wonderful for many people – especially for the generation of our parents, grandparents and great-grandparents, who lived in the same city and worked in the same job – their entire lives. Once again, these are points of view marked by a few generations.

Another interesting advantage is the possibility of renting the property, which helps with payment of installments, if you choose financing.

Investment in real estate is often focused on owning a home – a very normal movement in Brazil. The biggest advantage of this movement is no longer paying rent – ​​the installment is reversed to acquire your own property.

There are even several ways to acquire a property and some of them can have great advantages. An example is the Property Auction, which can be considered a good investment in some cases. Read more about Property Auctions here.

Is property an investment? And what about your own home? The disadvantages of investing in real estate

The first point is that you now have a fixed monthly installment, with interest, for 30 years, to maintain your home – and normally the installment is considerably higher than the rent.

And this is one of the main dangers for those looking to own their own home: parting with the remaining money and committing to a portion, in addition to parting with savings for the down payment.

Numerous calculations show that, if you save the difference between the installment and the rent and opt for an apartment with a lower rental price, you will be able to save much more and buy an apartment much cheaper.

Furthermore, the tax on real estate investments reaches 27.5%, different from other investments on the market.

A good exit

One way to be able to invest in real estate while you increase your wealth is to invest in real estate securities, such as Real Estate Investment Funds. The funds are exempt from income tax, have a large portfolio of properties (several properties spread across Brazil) and have liquidity.

In 30 years, you will probably have assets much greater than just an apartment.