Where do you want to stay – in a big house with a lawn, in a small apartment?
Do you want to stay in the big city, or in a small hamlet? There are many questions to consider when deciding where and how to live, and much has nothing to do with money, as we saw in What is a financial investment? Financially the big question is, of course, “to buy or not to buy?” Is a house an investment?
House prices generally go up, although some years may show much better growth than others.
On average, over the long term, this growth is very close to inflation. This is to be expected. Houses are constructed from bricks and mortar and other materials, all of which become more expensive, in line with inflation, as years go by. And the wages of builders and architects, as well as the land on which a building stands, also tend to go up with inflation.
A home then, which grows with inflation, but also requires some maintenance, is not a financial investment. As a rule, property is only a financial investment when it is rented out.
For many people, the best strategy is this: Buy the cheapest property in which you can live comfortably. Invest the rest of your available funds in assets that actually beat inflation.
Some advantages of owning your home
Some disadvantages of owning your home
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