A home that’s a good investment appreciates with time, which can equate to earning serious cash if you sell the property after many years of ownership.
“While transaction costs will take a bite out of your wallet when buying a home, price appreciation should help make up for it,” Diodato said. “Historically, home prices have increased by just under 4% a year, [but] over the last year, they’ve gone up 18.6%.”
However, he said you can’t expect this trend to last.
“It’s important to realize that we’re currently in an unusual environment and that expecting this type of price growth over the long-term is unrealistic,” he said. “For example, at an annual appreciation rate of 18.6%, the price of a home today would increase tenfold in about 14 years. Sounds unlikely.”