These days, it can be difficult to figure out how to optimize your small business. With markets changing so quickly, new digital threats and solutions constantly trying to outpace each other, and old paradigms being thrown out the window, it can be unclear what wisdom still rings true and what is in need of an update.
Even in this time of rapid economic transitions, some old standbys remain. If there is one thing that remains true in America, it’s that buying property is, in general, a worthwhile investment. While the housing market may fluctuate over a ten- to twenty-year period, in general, home-owning is a safer bet than many stocks in the long run. Consider these reasons.
Property Generally Accumulates Value Over Time
This is especially true in urban areas, where recent trends have seen an influx of people from suburbs and exurbs. You may lose hope when markets slow or recessions hit, but if you hold out and make sure that you’re maintaining general upkeep on your home, there’s a solid chance that in a few years its value will actually increase above your principle appreciably. Before buying, it’s good to take a look at what states are growing. Colorado, for instance, is growing at a rate above the national average, and property values are reflecting this there. Oklahoma, on the other hand, may be riskier.
If You’re Smart About It, Property Can Be A Reasonably Low-Risk Investment
Think about it this way. Say that you’re operating your business out of your home office, or even paying rent for an office space. The trouble with rent is that those payments are completely lost. You’ll never see the five years of rent checks you paid out again. However, if you are making mortgage payments, that money is something that you could see again. So, even if your property is worth 12% less than what you paid for it 10 years later and you desperately need to sell, you’ll be able to recover more of your capital than if you’d been renting.
Owning A Home Gives You Better Resources For Taking Out Loans For Your Business
After all, this is something that the bank can assess as part of your net worth to manage risk. This is especially helpful if you’re running a small business. Sticking with Colorado, say you are starting out owning a tire store in Fort Collins. You might be able to apply for a stated income loan in Colorado, and know that you own property in a rapidly growing state, should worse come to worst. Being a trustworthy lender can impact your business immensely. It can mean the difference between sky high interest rates on your loans, and reasonable ones that make business run smoothly and comfortably. Owning property increases your capital and your credit score – both things that business owners should always have at the forefront of their minds.
Many Businesses Are Moving Toward Remote Work
In our interconnected age, many industries are moving toward remote work, and even moving toward legions of self- employed contractors who provide their services online. If you find yourself moving in this direction, it could be a smart move to own property instead of renting it. It increases your capital, decreases your number of wasted expenditures, and sets you on a path toward financial growth long-term. It’s true that homeownership is a larger up-front cost, but it can have down-stream effects that are hugely beneficial for your small business.
Conclusion
Make sure that you do plenty of market research and have a solid knowledge of trends before putting a down payment on any property. Remember that keeping your eye on long- term growth can be a much safer and wiser business move than jumping at opportunities for a quick buck in the short term! Of course, as with any financial advice, the best answer is always “it depends.” However, in general, it’s safe to say that owning a home and not paying rent is, as long as you can safely afford it, a savvy business move.
