Invest in Your Future
While the days of the "get rich quick" real estate market may be over for now, remember, that real estate is a longer-term investment that requires a look at the big picture.
Real Estate Builds Value Over Time
According to a recent Harvard University Joint Center for Housing Studies report, the rate of return on a housing investment dramatically increases the longer it is held. For instance, an owner whose home appreciates at a typical annual rate of 5 percent and who made a cash down payment of 10 percent will generally receive a 94 percent return after owning the home for only three years. After owning for five years, a homeowner can typically expect the rate of return to increase to 225 percent; after 10 years, the rate of return jumps to 623 percent.
Other Factors to Consider
In addition to building value, real estate payments boost net worth by building equity that homeowners can borrow against. And, that increased net worth can help homeowners afford more of a home when they go to upgrade. Additionally, the interest and real estate taxes on a mortgage are deductible, enabling homeowners to subtract part of their housing-related expenses from their income, reducing overall income tax liability.
Learn More About the Real Estate Process
