Buying a property is one of the most important financial decisions in life and with it comes a lot of responsibility but also a lot of rewards.
For many of us, owning a property is a sign of stability, financial success, and an incredible sense of belonging. Owning a vacation home can be a bit of a daunting dream with all the hassle involved in owning and looking after a home, but the payoff is truly rewarding!
“Is it better to own a vacation home or rent one when I want to use it?”. That is the real question on the table. Although the costs of properties have increased over time, the benefits of owning far outweigh the drawbacks. In the long run it is much more profitable to own a vacation home than to continue renting one, but there are other variables to consider as well. In today’s article we will analyze the financial benefits obtained by investing in your own home to vacation in with the whole family.
1. Investing in an appreciating asset
Most real estate tends to appreciate over time. Historically, the value of land as well as both residential and commercial real estate have gone up over time, making real estate one of the most stable investments a person can make. Therefore, every penny you invest in your home today will be worth more tomorrow.
In recent decades, it has not been uncommon to see property values increase 10% or more year over year. In Mexico this number jumps to 15-20% due to supply scarcity and an increase in demand in the vacation home market specifically, homes cannot be built fast enough to keep pace with demand, causing the prices to soar.
2. Strengthen your credit history
Acquiring a property helps strengthen your personal credit, assuming you make your monthly payments on time. As you build your credit history, it will be easier and cheaper to secure other forms of financing. This means you pay less the stronger your credit score is.
Therefore, it is very important to keep good records and pay before the due dates. And as your mortgage balance goes down, your credit score will go up. That is, in essence, a great way to build your personal credit.
3. Wealth creation
As the value of your property grows, so does your own equity, giving you the opportunity to make a profit by selling your property. If you purchase a fraction of your luxury property with Ancana, you will have the right to sell your fraction after 12 months of ownership at the price you choose. The gains are entirely yours to keep!
In the end, Ancana can help you facilitate the sale if you prefer, using our database of qualified buyers. Alternatively, you can sell the property on your own or through an agent of your choice. The profits from the sale can be used to pay for your child’s college education, move up your retirement date, or to purchase multiple Ancana fractions so you’ll always have somewhere incredible to visit! .
4. Financial stability
Owning your vacation home provides a sense of peace of mind, both in terms of lifestyle and financial stability. A vacation home is an asset where you can make memories that will last a lifetime. In fact, in some cases, monthly mortgage payments can be less expensive than rental rates for a comparable home. When your home is paid off, the costs of travel decrease dramatically without ever having to sacrifice quality.
5. You will have a hedge against inflation
Like anything else, vacation homes are subject to market conditions and inflationary pressures. For example, let’s say you are renting the same vacation home in your favorite destination every year. But now that destination becomes more popular, or a major development is built nearby, or the owner of the home makes improvements, the cost of renting this vacation home will likely increase.
However, when you own your home, the increased demand means your home is worth more, which is money that goes straight into your pockets. And if you used a mortgage to buy the home, it likely comes with a long-term fixed rate, allowing you to stay in your home at the current purchase price for decades to come.
Finally, real estate is a great hedge against financial market volatility and economic downturns. Real estate is one of the few investments with a consistent track record of increasing in value, regardless of market conditions. Even during the Coronavirus pandemic the values of luxury vacation homes increased over 20% in high-demand markets.
If owning your vacation home is part of your dream, it’s important that you take the time to familiarize yourself with all of the benefits of owning a vacation home as this will set you up for success when the time is right to make that purchase. If you are ready to take the first step towards buying your own luxury vacation home and becoming a co-owner, check out our page now to learn how to make this dream a reality.
Owning a vacation home has never been this easy.
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