A big plus in home ownership is the investment potential. If the housing market is inflating rapidly, your home’s value may increase sizably in just a year. When the market’s more stable, that kind of increase may take three years or more. And, there are steps you can take before you buy—to help ensure a sound investment. First—get your realtor’s help in determining the rate at which values are rising. Ask her for the last several years’ sale prices of comparable houses nearby. That information is public record in most states. So you probably can do your own research at your county tax assessor’s office. 

To help ensure you’re not overpaying, your realtor also can give you current sale prices for comparable homes. Be sure to have your home inspected, to help avoid expensive surprises down the road. Keep in mind, your home’s investment potential doesn’t end when you move. You can rent the home to tenants and sell when its value has increased even more. Be sure the rental market supports the your monthly mortgage payment plus a little extra for repairs. You can deduct taxes and interest as you do on your primary residence. But unlike your primary residence, you also can deduct all insurance and maintenance costs. Being a savvy buyer helps you predict the return you’ll get on an investment in the American dream—your home.