https://activerain.com/droplet/5lrc
Success is something often worth repeating, and Brent Sutherland, a Certified Financial Planner and Real Estate Investor, has certainly made his way in a momentum-driving direction. Here are 3 tips he shares from a recent piece in Business Insider on the benefits of owning real estate:
1. Real estate diversifies your income
“While it is certainly important to be properly diversified with your investments, it is even more important to be diversified with your income. This is because the largest financial risk for most of you is the loss of your primary source of income, which is typically in the form of a day job.”
The article highlights how 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. Sound dreamy? It can be. When done well, real estate investments may eventually open up your time and the financial freedom to explore other things, like travel and other aspirations you may have for the future, particularly in the golden years of retirement.
2. Real estate produces near-immediate results
“You can achieve and feel the results almost immediately. Property improvements are visible and tangible. You can cash, spend, and invest rent payments. Today! Not 30 years in the future.”
Currently, home prices are appreciating in all price ranges, and just last week CoreLogic announced their 12-month home value projection at 5.6%, an increase from 4.5% noted earlier this summer. With that in mind, real estate today is definitely driving immediate results!
“If you need $40,000 a year to live, you could alternatively invest in assets that generate an 8% cash-on-cash return. This is a very reasonable assumption. And it means you would only need to save a total of $500,000 (instead of $1 million). Yet, your investments would still meet your annual household living needs.While returns, taxes, and inflation can, of course, affect your timeline, cash-flowing real-estate is a clear asset.”
Homeownership is a form of ‘forced savings.’ 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.
Bottom Line
If you want to increase your savings and overall net worth, real estate is a great way to go. To learn how you can make it happen, let’s get together to discuss the process.
Who is Brent Sutherland?
Sutherland was 35 when he bought his first single home to rent out for income, less than five years later, he owns eight additional properties and part of a commercial real estate project.
Facebook Badge
About Me
- Chris B Johnson REALTOR®
- Chris B. Johnson REALTOR® Specializes in Luxury Estates and Home Auctions. Your home is probably the biggest asset you own. This is why you should hire a professional to guide you through all your real estate transactions. My goal is to help 24 to 28 families each year either buy or sell a home. I am NOT interested in Selling 100 or 200 homes a year because I would not be able to give each family the time, attention and energy they deserve. I believe in Quality, NOT Quantity.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
#ChrisBJohnsonREALTOR,#TopProducer,#FlipandFix,#RealEstateInvestor,#RentalProperties, #BoomerageBuyers,#MultiGenerationalBuyers,#AJIBoom,#FindYourDreamHome,#PreApproval
The Down Payment Hurdle: Maybe Easier to Overcome
ReplyDeleteThan You Think
The California housing market continues to be invigorated by low mortgage rates, which has led to a yearover-year increase in home sales for the second month in a row. At just over 400,000 sales in the month of
September, the 5.8 percent year-over-year increase is the highest growth rate seen since March 2017. Lower
interest rates caused the monthly payment on the median-priced home to drop 7.4 percent from last
September, continuing the declining trend that started in March 2019. The dip in mortgage payment, which
enables home buyers to save hundreds of dollars, is an important variable that could help sustain the sales
momentum through the remaining part of 2019.
But housing affordability is not just about mortgage payments. Down payments also play a huge role in
holding buyers back from buying sooner. According to the California Association of REALTORS® 2019
Consumer Survey, over a quarter of buyers say they would have purchased sooner, but they needed to save
for their down payment first. And this is felt to an even higher degree by younger generations, with two out
of every three millennials reporting the need to save for a down payment. With the median price remaining
near the record high, and a typical buyer still putting 20 percent down, the median down payment for a
single-family home in California in September was $121,136- a number nearly $20,000 higher than the
median household income reported by California buyers and nearly $25,000 higher than the median income
of younger buyers, resulting in millennials saving for a median of four years with 24 percent saving for eight
years or more.
That said, a whopping 2/3 of potential buyers say they would start looking for a house now if they knew they
could qualify for a mortgage with a much lower down payment. Eighty-one percent do not know how much
they would qualify for a home loan and only 21 percent are aware of first-time buyer programs in their area.
This little bit of knowledge could be the push they need as two in five potential buyers have already started
to save for a down payment, and yet 61 percent of them think they will need to put down 20 percent or
more, with 17 percent of that group think 50 percent or more is needed.
There are a number of low down payment alternatives available to help buyers get into a home sooner.
Down payment assistance programs offer loans, typically with a low interest rate. Some of them aimed
specifically at helping both first-time buyers and low- to moderate-income buyers get into a home. Mortgage
credit certificates allow an increase in income by obtaining a tax credit for a specified percentage of
mortgage interest. Grants and gifts may be offered by state and federal governments, non-profit
organizations, or the local community. For more information, visit downpayment.car.org.