You probably know that during the real estate “bubble” of the last decade, people treated their Fernandina Beach homes as if they were ATMs, drawing equity out with refinances.
These days, with so many homeowners “underwater” – owing more on a home than it’s worth – I keep hearing the same question:
“Is my primary residence still considered an investment?”
My answer is that, yes, it’s an investment. But I think it’s fair to look at the home you live in as kind of a unique investment.
When you buy a stock as an investment, you can gain wealth by that stock appreciating in value. You also can gain recurring income in the form of dividends that stock pays.
Traditionally, the home you live in has been looked at in largely the same way. You benefit from appreciation – it going up in value – and in the form of dividends along the way, such as tax breaks. Now that we have learned that homes don’t necessarily appreciate constantly, it’s a good idea to look at the dividends your Fernandina Beach home pays. And I’m not just talking about tax breaks.
When you “invest,” say, in a college education (Go Gators!), the dividends it pays aren’t necessarily financial ones. Sure, you might land a job that pays better than one you might get without a degree, but the real dividend is the education you receive, and the experience you gain.
You can look at a book the same way. You invest money into purchasing the book, and the dividend you receive is the knowledge you gain from it, and/or the enjoyment you get out of it. A much-needed family vacation that creates lasting memories is an investment, too; even if it pays you in terms of emotional, rather than financial, dividends.
And in a lot of ways, it’s the same thing with your home on Amelia Island. I have always said that you shouldn’t get emotionally attached to homes you buy strictly as income properties, but the home you live in is bound to hold some emotional value to you. That might be harder to measure than money, but being hard to measure doesn’t necessarily make it a worse type of investment.
Your dividends on that type of investment are the enjoyment you get out of living in a Fernandina Beach home you love. They are the experiences you and your family share in that home; the satisfaction you gain from being a homeowner here on Amelia island.
In that regard, your home is an investment that pays not necessarily in dollars and cents but in your happiness and well-being. And those things are valuable. As we all know, Amelia Island living is priceless!
That’s why, yes, your primary residence in Fernandina Beach is an investment. You put something in, and you receive something in return. The articles that you might read about Fernandina Beach real estate NOT being a good investment don’t take that into account – it’s ALL dollars-and-cents to the media.
And in the long term, I think the dollars-and-cents are likely to work out. Just remember that when you’re talking about the home you live in, “investment” doesn’t simply mean dollars and cents.
