How To Increase Your Financial Strength by Purchasing Real Estate
Real Quick Real Estate - How To Increase Your Financial Strength by Purchasing Real Estate
Everyone wants more money and a high financial net worth. One way to increase your net worth is through purchasing real estate and enjoying the benefits of increasing home equity.
What is equity? Equity is defined by your current home(s) market value minus any loans taken out against the property.
The more equity you have, the stronger your financial strength is.
So that begs the question, how do you get more equity and increase your financial strength?
Buy real estate at the right time
Just like the stock market, you want to buy low and sell high. Even with the uptick in interest rates, right now is a good time to buy as the average home price dropped in our local market by over $30,000 in October , and I don’t think we have seen the bottom yet.
Know the math behind increasing equity
Homes historically have always increased in value over time. As an example, the average home price in our area in October 2012 was $260,000. The average price has gone up $130,000 in value since then!
Not only that, but when you pay down your mortgage each month you also get more equity! On a $260,000 loan at 5% interest rate, in the first 10 years you gain $50,000 in equity on top of the home appreciation!
So just by making monthly payments, in 10 years, you have an extra $180,000 to work with in financial strength on a $260,000 purchase!
If you make updates, focus on the right ones
Per a National Association of Realtor Report, projects like hardwood refinishing, new wood flooring and insulation upgrades are currently netting over 100% return on investment!
There’s big opportunity for you beyond your primary residence
Have you considered investing in real estate? With the volatility of the stock market, many people are looking at real estate investment to grow their financial strength.
I worked with a few clients last year that made over $200,000 in real estate alone last year through a combination of long-term rentals, flips, vacation rentals, short-term rentals, and I can also help you accomplish your goals!
Some clients have sold their homes and use those proceeds to fund their real estate investment journey.
There’s always an opportunity in real estate. The most powerful thing you can do is not only follow steps #1- #3 above, but the icing on the cake is….. have someone else pay your monthly payment.
That way you can sit back, have someone else pay your mortgage down, and enjoy the big gains in home equity!
That’s how you build an a real estate portfolio and a fix and flip empire.