For many people, their home is their largest financial asset. Although the home is often an emotional purchase, it is wise to also consider how it stacks up as an investment. If you look at the statistics of how homes have appreciated over the past 20 years, it quickly becomes clear that your house can provide a vehicle to store and build wealth. The trick is buy and hold and do not expect to turn a quick profit. Typical housing cycles are 7-10 years so real growth is in the long-term.
Ironically, there is misconception by some that Investing in Real Estate a risky proposition, when in fact it is a predictable source of appreciation and revenue if purchased correctly and allowed ample time to mature. Just like any other investment, when investing in Real Estate you should not plan on seeing a return for several years. My personal Real Estate portfolio began with an “accidental” investment in 1996. As a single woman, I purchased a duplex home in a neighborhood that was at the outer limits of my financial means. By purchasing a duplex, as opposed to a single family home, I was able to live on one side and rent out the other and by default became a landlord and an investor. It turned out having a tenant pay a portion of my rent provided a great financial benefit. In fact, it was such a good investment that three years later when my husband and I opted to buy a single-family home and move to Barton Hills we were able to hang onto the duplex as an investment property. Twenty years later I still own that duplex as well as 3 others plus 2 single family income properties. My husband and I have found investing in Real Estate to be so profitable that we have committed to purchasing one property a year until we have enough cash flow to retire. Last summer, my husband, who formerly worked in the oil and gas industry as an engineer, was unexpectedly laid off from his job. Our rental properties kept us afloat during this unexpected downturn in income. In fact, rather than cutting back on expenses, we opted to leverage the original property purchased in 1996 and use our stored equity in that property to finance 2 more investment properties. If you are interested in learning more about investing in Real Estate I can suggest reading “the Millionaire Real Estate Investor” by Gary Keller, Dave Jenks and Jay Papasan. This book was what first opened my eyes to the opportunities to build wealth through Real Estate. Contact me at Edy@EdyKnowsAustin.com to schedule a private consultation on the subject.