Real estate values appreciate along with the inflation that the USA creates.
Even after the global recession in the mid-2000s, single family home values are still higher than they were in the 1990s.
In fact there has been a recession almost every decade in the US since the 1970s when Nixon removed the gold standard.
Kathy Fettke shares tips for real estate investing.
In the long run, real estate is a very good investment strategy.
Even if you bought back at the top of the market and owe more than your home is worth, many lenders are letting you refi at a lower rate and some even forgive part of your debt and refi you at a lower rate.
Real estate also allows you to leverage the asset at a very high amount. This means typically you only need 5% to 20% down in order to purchase.
Then you can rent the property out and let your tenant pays off your mortgage, insurance and property taxes.
And think about this, if real estate continues to grow at a 5% rate, a $150,000 home could be worth over $600,000 in 30 years.
Kathy Fettke continues her series and talks about leverage.
If you don’t have 30 years to pay off the home and you want to retire sooner, then if you paid an extra $1000 per year, the home would be paid off in 22.5 years.
If you paid an extra $2,500 per year that would drop to 17 years and an extra $5000 per year would lower the payoff time to 12.3 years.
Not a bad investment…
A really good method to purchase homes is to use a hard money lender to do the initial purchase and then refinance in 6 months to a traditional mortgage with a lower interest rate.
This will get you into the home very quickly and on your way to investing stardom.
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