When you live in a developing country, working overseas tends to be your best option if you want to earn a higher salary. It may put you oceans apart from your family, but at least your remittances can give them a better quality of life. But are you spending your remittances wisely?
Once your family holds your remittance, you may have little control over what they do with it. But if they still follow your direction when it comes to budgeting, you can make the most important financial decisions for your family. Whether they can live in a better home or earn an income themselves, it’s up to you.
That said, here are the ways to invest your earnings in real estate:
1. Home Renovation
Many people who want to improve their abodes choose to renovate instead of buying a new home. Obviously, renovating an existing space is cheaper than purchasing an unfurnished brand-new home. And, of course, building from the ground up doesn’t fit most ordinary workers’ budgets.
But if you want your home to increase in value, renovation isn’t always the right move. Before changing your plans, however, answer these three questions first:
- Where is my existing home’s location?
- Can this home make my life easier?
- Will we outgrow this home in time?
Cost is another factor to consider. If your budget can afford a renovation, then it’s either you push it or wait until you can afford a new home. But if your answer to the first question is a good one, like a metropolitan or suburban location, a renovation may suffice to increase your home’s value. After all, many buyers are on the lookout for abodes near major cities.
But can your home make your life easier? If you’re going to renovate it, then it should also increase your and your family’s convenience as a result. Your home shouldn’t just improve its looks but also have better accessibility and allowance for major life changes. For example, your kids going to college. By that time, they’d demand more space for their school stuff. If your existing home can provide that for them after renovation, the costs will be worth it.
What if you outgrow the home, then? If you renovated your space dramatically but still have a different dream home, postponing your plans is the most practical route. Reconsider your decision; why will you spend thousands of dollars for a home you don’t see yourself living in for the long term? Unless you can find a buyer for it in the future, cancel your renovation plans and consider buying instead.
2. A New Home
There are many reasons why buying a new home is better than renovating. First of all, it allows you to enjoy the space right away, as opposed to putting up with a construction mess during renovation. Also, if you have good credit, you can apply for an affordable mortgage with flexible terms.
But putting renovation aside, a new primary home is a good real estate investment because it allows you to earn equity. Home equity is the percentage of your home that you actually own. For example, if you have a $250,000 mortgage, and you’ve already repaid $100,000, then 40% of the home is fully yours, while the remaining 60% is still your lender’s. You can borrow against your equity and use the cash for other purchases, such as tuition fees or health essentials.
Before buying a home, though, consider your needs, budget, different real estate developers, and your loan options. Your new home should satisfy your needs in ways your existing abode could no longer do. Your budget, of course, should cover the down payment and new furnishings. The real estate developer in your options should be reputable ones, and lastly, your loan options must fit your income.
3. Rental Property
If you have no problems with your current home, make a rental property your target. You can buy a condo unit in a good location, a townhouse, or a vacation home for short-term rentals. Income from the last is hard to come by these days, though, because of the pandemic. But since travel restrictions have been eased down, many people are looking for cheap Airbnb accommodations again. So as the demand recovers, be part of the competitive market by investing in a safe, secure, and beautiful vacation home.
Investing your remittances in real estate will allow you to grow your income more quickly, making it possible to return home sooner and start a new stable career there. Sometimes, the best opportunities aren’t that far, but in front of you all along. So look into affordable real estate now, and grab those very opportunities once you can.