Real estate still a sound investment
Even in slow market, buying pays off
BY KEN TARBOUS
GANNETT NEWS SERVICE
December 31, 2006
Despite the recent fluctuations in real estate prices nationwide and sale prices that have fallen short of sellers' expectations, homeownership has proved to be a good long-term investment, financial experts agree.
Buying a home is the largest investment most people will ever make, said Shrikant Nadkarni, a certified public accountant, certified financial planner and shareholder at WithumSmith+Brown PC's Somerville, N.J., office.
"Owning a home over a long period of time is a good investment idea," Nadkarni said. "It brings financial obligations and forces savings through paying down the mortgage while building equity."
Andrea Pemberton-Fowler, 54, who recently sold her North Brunswick, N.J., home for $349,000 -- considerably more than the $155,000 she and her late husband bought it for in 1990 -- has considered the cost of upkeep on the house over the years and its impact on her finances. The youngest of her three children is now in college.
"I guess if I hadn't had the house I wouldn't have the money that I'm getting now, because I probably would have spent it instead of putting it somewhere. ... With kids there's always something," she said.
"I think anybody who's buying now should not be looking at a house as an investment," said David Walter, president and chief investment officer of Halberstadt Financial Consultants Inc. in Princeton, N.J. "Look at it as a place to live for the long term, but don't look at it to give you a return the way it did over the last 10 years."
Nadkarni said that in today's market, with rising interest rates and softening real estate prices, buying a home to make a short-term profit is certainly not an attractive proposition.
"When purchasing your home and taking on a mortgage, it is important to review your cash flows and factor the tax benefits from the deductions prior to deciding on the home you can afford to own," he said.
Even in slow market, buying pays off
BY KEN TARBOUS
GANNETT NEWS SERVICE
December 31, 2006
Despite the recent fluctuations in real estate prices nationwide and sale prices that have fallen short of sellers' expectations, homeownership has proved to be a good long-term investment, financial experts agree.
Buying a home is the largest investment most people will ever make, said Shrikant Nadkarni, a certified public accountant, certified financial planner and shareholder at WithumSmith+Brown PC's Somerville, N.J., office.
"Owning a home over a long period of time is a good investment idea," Nadkarni said. "It brings financial obligations and forces savings through paying down the mortgage while building equity."
Andrea Pemberton-Fowler, 54, who recently sold her North Brunswick, N.J., home for $349,000 -- considerably more than the $155,000 she and her late husband bought it for in 1990 -- has considered the cost of upkeep on the house over the years and its impact on her finances. The youngest of her three children is now in college.
"I guess if I hadn't had the house I wouldn't have the money that I'm getting now, because I probably would have spent it instead of putting it somewhere. ... With kids there's always something," she said.
"I think anybody who's buying now should not be looking at a house as an investment," said David Walter, president and chief investment officer of Halberstadt Financial Consultants Inc. in Princeton, N.J. "Look at it as a place to live for the long term, but don't look at it to give you a return the way it did over the last 10 years."
Nadkarni said that in today's market, with rising interest rates and softening real estate prices, buying a home to make a short-term profit is certainly not an attractive proposition.
"When purchasing your home and taking on a mortgage, it is important to review your cash flows and factor the tax benefits from the deductions prior to deciding on the home you can afford to own," he said.
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