Financial Fitness in Real Estate
Financial fitness is among the most ignored aspects of real estate. One reason this might be is due to inadequate knowledge of its necessity. Real estate, when done properly, can result in huge benefits, which is why you must be financially fit to function effectively in this field. Many, when getting involved in real estate, are thinking it’s all about purchasing a house — not realizing it starts way before this moment. Financial fitness doesn’t just involve buying a house. It also deals with projecting into the future. Projection is important because it can be important that you know your income potential at the beginning, middle and ending of your lifetime in this house. You wouldn’t want to buy a very expensive house at the ending stage of your income potential and be stuck with a 30 year mortgage, for example.
From a financial perspective, there are numerous mistakes that house buyers make, which often has a bad ending. A couple are:
- Buying a house before you are ready.
- Not Considering future events.
People see buying a house as a piece of adulthood, so they become eager to get into their first home. But actually, buying a house before being ready might mean many things — not having an idea of the true cost of buying a house, not having sufficient savings, or not having the job stability that is required to maintain a home and mortgage. Buying a house is just one part of the puzzle. Avoiding these mistakes is to be prepared, which comes by receiving sound counsel from an expert.
Future events alter the choice of houses people acquire due to the need for expansion. As one reaches adulthood and responsibilities increase, one tends to see a need for an increase in space. It is without prior planning for possible transitions that one can feel forced to acquire a new house, sometimes causing people buy too much house, which consequently impedes on the financial fitness of a person. So it is advisable that one considers future events, know his financial status and find a house that fits the bill.
The infographic from the Centre for California Real Estate depicts the variation in financial fitness of various generations. The Mature generation with age birthdate ranges between (1925 and 1946), Generation Xers range between (1965 and 1980), Boomers range between (1946 and 1964), and the Millennial generation range (1980 and 1990s).
Every generation is divided into percentages in three categories. Financially Stable have just enough to get by and may be experiencing financial difficulties. The Financially Comfortable percentage are those who are said to be financially fit to acquire and maintain a house, with the Matures generation having the highest percentage, and the Xers generation having the lowest. More houses are owned by the Matures generation while the Xers generation own less, which imply that the Matures generation is the most financially fit while the Xers generation are the least in financial fitness.
Originally published at bukkalevy.kw.com on March 6, 2017.