by David Brenton, Team Broker/Owner
You should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of “forced savings” which allows you to use your monthly housing costs to increase your family’s wealth.
Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equity. As your home’s value increases, you also gain home equity.
Conversely, if you are renting, your monthly payment does not increase your equity or financial position. Your rent may go up over time, but you never earn any value from what you are paying.
While some argue that renting eliminates the cost of taxes and home repairs, every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment – along with a profit margin!
“Every time you pay your mortgage, you’re contributing to your net worth by increasing the equity in your home, bringing you one step closer to true financial independence.”
Americans also view Real Estate as the “safest investment”, as its various income options yield long-term opportunities.
Owning real estate can also diversify your income. Having multiple sources of income, such as those derived from real estate investments, can eventually lead to relying less and less on a day job.
When done well, real estate investments may eventually open up your time and the financial freedom to explore your interests, like travel and aspirations you may have for the future, particularly in the golden years of retirement.
Additionally, the equity you accrue over time can be accessed in the form of a second mortgage or home equity loan. This allows you to liquidate and re-allocate money as other life events take precedence.
Many homeowners have used their built-up equity to pay for college tuition, a once-in-a-lifetime vacation opportunity, or urgent home repairs.
If you want to increase your savings and overall net worth, real estate is a great way to do so. My Team of dedicated professionals is here to guide you through the process so you can make it happen.