Is real estate the best long term investment. In my opinion, it is, without a doubt. I can only go by my personal experience and the facts that are available to anyone interested. I got started in the mortgage business in Houston, Texas in 1975. One year before Cheryl Miller Bustin and I were married. Our first home was a 1 bedroom apartment, but being in the mortgage business, I was totally involved in real estate. At the time, tract homes ( like Richmond, Lennar, DR Horton, etc.) were selling for around $50,000. Those homes today, in the Houston Metro Area, are valued at $350,000 to $500,000. That's pretty impressive. I do realize that much larger returns have been achieved in the stock market. And, if someone invested $50,000, 50 years ago in a savings account, it might be more. But, here's the difference. And it's a major difference. It's your home. It's where you live. It's tangible. Oh, let's not forget the savings in income tax over those 50 years. When it's all said and done, the return on the home is probably the greatest.
Another example, would be home appreciation over the last 10 years. I understand that we live in a "hot' market here in Colorado. But, our home (and most people's homes) have doubled in value over the last 10 years. A $250,000 home is now worth $500,000. A $400,000 home is now worth $800,000. The higher you go up in value, the less percentage increase. But, all homes have seen great price increases. For many of us, it's dramatically increased out net worth, and changed our future financial outlook.
So, bottom line. Buy now. And, buy as much as you can and are comfortable with. In the long run, you will be so glad you did.
Real Estate Is Still Considered the Best Long-Term Investment
With all the headlines circulating about home prices and rising mortgage rates, you may wonder if it still makes sense to invest in homeownership right now. A recent poll from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11th consecutive year, consistently beating other investment types like gold, stocks, and bonds (see graph below):
If you’re thinking about purchasing a home, let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision.
Why Do Americans Still Feel So Positive About the Value of Investing in a Home?
Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes:
“. . . homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”
That’s because owning a home grows your net worth over time as your home appreciates in value and as you pay down your mortgage. And, since building that wealth takes time, it may make sense to start as soon as you can. If you wait to buy and keep renting, you’ll miss out on those monthly housing payments going toward your home equity.
Bottom Line
Buying a home is a powerful decision. So, it’s no wonder so many people view real estate as the best long-term investment. If you’re ready to start on your own journey toward homeownership, let’s connect today.