Buying your first home is almost invariably the biggest purchase of your life, and for most Finns, it is the most important form of wealth. This is why I want to encourage more and more (first) home buyers to think like a home investor when buying a home. Before buying my first home, I had worked in property investment, so I wanted to use what I had learned and build up my wealth through home ownership. My plan was simply this:
1. Buy a home with potential for appreciation
2. Renovate your home and sell it tax-free after two years of living there
3. Repeat
Buying at
As home investors often say, in housing transactions, the return is made when you buy. The most important step in this whole process is definitely buying a home. When buying, you should pay particular attention to the location and the housing company. Is the area developing, and are house prices in the area rising? How long are the average sales times in the region? You can read more about choosing a region here.
In the case of a building society, it is particularly worth looking at the timing of major renovations. For example, if you are buying a house with a pipe renovation in five years’ time, it may be difficult to sell it in a couple of years’ time when the pipe renovation is approaching. My first home was undergoing a renovation when I bought it. This makes the apartment easy to sell in time, as the future buyer does not have to worry about future major building society renovations.
If you are planning to increase the value of your home by renovating it, you should look for homes in poor condition. Of course, renovating an entire apartment is quite expensive, so a good option might be an apartment with a well-maintained bathroom but which otherwise needs updating. When buying, you need to know your budget and buying criteria, and be prepared to move quickly. You should also be familiar with the price level in the area to be able to identify good deals.
Renovation
In growing and developing areas, home prices may rise anyway, but those with the skills to renovate should consider increasing the value of their home. When renovating, it is also worth thinking like an investor and doing the renovation cost-effectively, i.e. by yourself if possible. However, when planning a renovation, it is worth taking into account the general price level in the area: in a high-value area, it may not be worth renovating with the cheapest materials. You don’t have to make your home all white either, a little personality can help you stand out from the crowd.
Sales
My plan is to sell the apartment as soon as I have lived in it for two years. This is because after two years of residence, the home can be sold tax-free. You can then buy a bigger home and, following this strategy, continue to “upgrade” to a more expensive home every two years. When selling, you should invest in good photos and a comprehensive advertisement, but as mentioned, the return is very much made when you buy the property.
The success of this plan depends on being fully familiar with the situation of the housing company and being well informed about the price level in the area, its development and the impact of possible renovations on the price of the apartment. If this seems difficult and cumbersome, you should hire an Oun expert to help you!
This is, of course, only one alternative way of dealing with housing transactions, and by no means the only right one. If you’re looking for a home for life and/or don’t want to think of it primarily as an investment but as a home, that’s just as good a way to go. But even in this situation, it’s worth asking OUN for help, and together we can find you a comfortable and carefree home!
(The author is a member of the OUN community)