Wealth Through Real Estate, Be Prepared

There are more millionaires created through the ownership of Real Estate than any other investment. If you were fortunate enough to own Real Estate over the past few years, you have seen a dramatic rise in your wealth. The more you owned the greater the gain.

Real Estate will continue to rise in the long term even if we do see a market correction in the short run as many anticipate. Today may not be the time to jump in and buy investment homes due to the volatility of the market today, but it won’t be long again before home prices stabilize and it is time to start buying again.

My suggestion would be to get your funding in order to be able to step in and take advantage of the opportunities of a soft market. Those able to react fast will be the ones that will benefit the most when the landing is over and the market is again taking off.

Some ways to prepare would be the use of the home equity in your primary residence to purchase other real estate. Credit lines may be right for some while others will find value in cashing out by refinancing into a larger first mortgage.

When values are low is the best time to move up.

If you are considering moving up, now may be the time. Although you may have to be aggressive in the sales price of your home to sell it, bear in mind that there are a lot more homes available to buy now, also at discounted values.

If you assume that you would have to sell a $250,000 home at 10% off for $25,000 less that you anticipate, also know that you would be able to buy a $500,000 at 10% off for a saving of $50,000, netting you a savings of $25,000.

If you wait until the market is hot again, there will be less homes to choose from and your likelihood of finding a bargain are slimmer. So, go out with your Realtor and take a look around first to confirm that it is a true buyers market for the homes you desire, then get your home on the market at an aggressive price. It’s a buyers market, take advantage of it.

Remember the Rule of 72s

The rule says that to find the number of years required to double your money at a given yield; you just divide the yield into 72. So if a home is gaining 6% per year, 6 divided into 72 equals 12 years.

With 6% being about the average appreciation of housing over the long run, that means that if you own a home today worth $500 Thousand, twelve years from now the home could be worth $1 Million for a gain of $500 Thousand!

With today’s tax law, for a married couple that gain is TAX FREE! There is no better investment that your own home, not your 401K, IRA or any other investment available.