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Is It a Good idea to Trade Up in a Bad Economy?

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By : Roby Hicks    99 or more times read
Although we have a bad economy, purchasing a bigger house remains to be tempting. Who would not want to trade their smaller house for an inexpensive bigger home? However, is this a good idea? Is it really a good time for a trade up?

Well, a trade up is a good idea. We are in a buyers’ market and everything is going in our way. We can easily find retirement home or vacation homes at a very low price. Although this is the case, it is crucial that we consider various factors first.

Trade up is good if you have investment in mind. Think about it, if you sell your home and purchase a bigger one, you can have the other rooms rented. You can even purchase a two-unit home and rent out the other unit. This is a great idea because the number of tenants has risen. You will have a better home, and you will not need to worry about paying the mortgage. But before house hunting, make sure that you keep these three important things in mind to avoid problems:

  • Trade up to invest. Many are trading up their homes because they want a bigger home. Although this is a good thing, this should not be your motivation in this type of economy. One cannot be too complacent as things can change in a snap of your finger. You may be earning well today, but lose your job tomorrow. It is essential that you prepare for the worst first. Having a bigger home will give you extra rooms that you can rent out. You can use the money from the rent to pay the mortgage.

  • Before you purchase a new home, sell your property first. This is to avoid problems. Bear in mind that it is extremely difficult to find a buyer today. Even professionals are finding it difficult to make a sale. Additionally, the values of the property have declined. This is why you have to prepare your property to get the best value for it. Repair the damages and make the necessary improvements too.

  • Do not just purchase the house because you can afford it. There are a lot of affordable homes today because the values of the properties have significantly declined. You will be able to afford properties that you are unable to afford before. However, this does not mean that you will also be able to afford the miscellaneous expenses that go with it. You have to include the maintenance and bills budget when looking for a house. You do not want to incur additional expenses especially in this kind of economy.

Trading up can be helpful. First, good properties are sold cheaply. You can use them to earn more by renting out the spare rooms or the other unit, if you are eyeing a two-unit property. However, choose the property wisely. Make sure that you can use it to earn more and not just to have a better and more expensive lifestyle.

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