Humans love possession. They are the things we not just own but love and take care. These are the assets we dream of or have been planning for a while. They come in form of automobiles, jewellery, high-end watches and most importantly, land and property. There is nothing better than having a property in possession. After all, it is a long-term asset that never depreciates, making it an investment opportunity. That brings us to the question, is there a difference between buying and investing in residential property?

Buying property is a common step for those who wish to possess that asset, be it of any use. Even before using it as an investment, one has to buy the property. There are various sources for purchasing, like savings, home loans, mortgages, etc. It is an extensive process and the cost depend on factors such as land rates, location, amenities and accessibilities in the vicinity. A person who buys property for the purpose of living in it will benefit in terms of future costs, property value and an abode for the future. In case of mortgages, the interest rates are usually lower than other loans and have a variety like fixed-rates and discounted offers.

Just how buying a residential property is essential, investing in it is no less. When a purchaser invests in property, he intends to earn a return income. Properties can be rented out to people for personal or professional uses, depending upon the purpose and documentation or can be resold, or both. Investing in a residential property by renting it out generates a fixed income that helps build wealth for the investor. Bigger property and higher rent rates bring more income. To earn an expected return, one has to pay a hefty amount to purchase a property of that value and also bear recurring costs on maintenance and furnishing. Investing in a residential property is more of a profit for the investor since it is long-term and there is no depreciation of rent rates. If one can starting investing in a property with a proper budget, it will slowly start giving increased returns, and then more properties can be bought for the same purpose, generating multiple income for the investor. Investing in a property for resell also gives a huge one-time return that will again generate profit for the investor because of a higher sale price.

Buying and investing in property has a big difference. Although, in today’s times, people rent homes rather than buy in the market. Increasing property and mortgage rates have made it difficult to purchase one, hence people find it cheaper to rent a house. It is always better to invest in a property and rent it out, because renting and reinvesting the amount from rents will build home equity and also create wealth for the future.