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Home ownership

Is your home an investment? Think carefully before you buy Add to ...

There are some very good reasons to invest in a home. But think carefully before you buy – especially if this is your only investment.

5 good reasons to invest in a home

  1. It has value – You own it (at least the part that you don’t owe the bank).

  2. It can go up in value – You may be able to sell it for more money than you paid for it.

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  3. You get to live in it – You have to live somewhere.

  4. You may pay the same as rent – The monthly mortgage payment may be about the same as rent.

  5. It forces you to save – With each mortgage payment you make, you own a little more of your home.

Be aware of the risks

  1. Housing prices can fall – You could lose money if you buy your home when prices are high, and then sell when prices are lower.

  2. Homes can get damaged – You could end up paying for fire, wind or water damage. Home insurance doesn’t always cover everything.

  3. Getting your money may not be easy – It can take weeks or months to sell your home.

  4. There are other costs – Examples: roof repairs, painting, heat, property taxes and hydro.

Buying a home can be an important part of your financial plan. But make sure you have a number of different investments to help spread risk. If one does poorly, others may do better.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

Follow us on Twitter: @GlobeInvestor

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