If you do decide to buy a house, buy an inexpensive one in an expensive area. Let everyone else’s properties increase the value of yours.
If you can, buy when interest rates are high. And/or when property prices are low. Don’t buy the biggest house you can afford. Just because you qualify for a large mortgage, that doesn’t mean you need to spend the full amount. Remember, banks are not your friends. Interest rates may fall eventually – along with your monthly mortgage payments – but they could go up first. Or later.
Settle your mortgage early, if you can. If your bank allows you to draw against these additional deposits, the cash will still be available if you need it for emergencies. Put your entire salary into your mortgage every month and save on interest until you need to take the money back to pay your bills.
But check with your bank first to ensure you have this kind of facility.
If you buy property in a secure complex, make sure the complex has a solid financial setup. High levels of cash in reserve mean you won’t have to foot the bill when they need to fork out for urgent repairs.
Everything stated here applies to your primary residence, the house where you live. Buying property as a separate investment is a completely different ball game.
Nicolas Cage fancied himself a property mogul. He owned 15 residences, including a haunted mansion in New Orleans, an island in the Bahamas, and a castle in England. In 2006, he bought another castle, this time in Bavaria, and his luck turned. He sold the 28-room castle in 2009.
He declared bankruptcy the same year.
Don’t be like Nicolas Cage.
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