The own home is a solid investment and a more favorable option than paying a rental fee, especially in times of high inflation and the country’s macroeconomic situation.
Buying a home offers a series of long-term benefits and advantages, both economic and emotional that empower Colombian families. In addition, it offers the possibility of building a heritage.
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When you buy your own home, you are investing in an asset
“Although there are fluctuations in the real estate market, in general, when you buy your own home you are investing in an asset that, if chosen well, can increase its value in the long term. This means that, in addition to enjoying a place to live , also you are building an estate that can generate profits in the future”, says Felipe Echavarría, growth manager of Home Capital Outlet.
According to Dane, in 2022, 39 percent of the country’s households lived in their own home, fully paid or in the process of payment, and 40.2 percent lived under lease or sublease.
The entity also indicates that the rents have a greater impact on the pocket the lower the household income. Other studies have also revealed that the salary is not enough for Colombians to survive monthly, and the cost of living is increasingly higher.
(Also read: Fall in entire home sales for 15 months; only 8,196 units were sold in May)
An apartment with 65 square meters, three bedrooms, two bathrooms, with a garage, and located in strategic areas, with access roads, close to schools, universities, a shopping center, among others, it has a market price of 250 million pesos.
Therefore, a monthly mortgage credit installment would be 2,616,000 pesosand it required 20 years to pay it off in its entirety, with an interest rate calculated on 1.385 percent month in arrears.
Now, for this same property, a person would be paying an average rental fee of 2,100,000 pesos, that is, at the same 20 years they would have spent 504 million pesos in rentwithout this payment generating an increase in their assets.
It is important to note that at this value the annual rent increase is not taken into account that the inflation data revealed by the Dane each year appeared.
(Also read: Camacol’s proposals to raise housing sales figures in Colombia)
Many of them will not be able to afford to pay the rents in the sectors where they used to live
In this sense, renting a property does not offer the possibility of increasing personal wealth. In addition, they must pay increments that can make financial planning difficult and affect the economic stability of a person.
“This implies additional pressure on families, since many of them will not be able to afford to pay the rents where they used to live, forcing them to travel to other areas of the city. In some cases, they are even forced to move and give up certain comforts”, says Felipe Echavarría.
In contrast, to invest in your own homeMonthly mortgage loan payments are made, which also depend on the size and location of the property, but with the difference that, once the payment is finalized, this financial burden will cease to exist.
Likewise, by owning the home, you have the possibility of personalizing it and adapting it to individual needs and tastes, something that cannot be done in a rental property.
