It’s always a great idea to invest in real estate. Financial advisors categorize real estate alongside bonds, stocks, commodities, and businesses as great options to make money off of your money. But following this piece of advice holds especially true for young people.
Here are just a few reasons why allocating your dollars into the housing market is critical while you’re young.
While it’s never too late to start buying, starting early on your home investment is a great strategy. Unlike renting, home ownership means being able to do what you please like executing home improvement projects. The biggest benefit, though, is building equity in your property. Say you purchased a home for $200,000 in 1995. Over the course of the next 20 plus years, you probably paid off the majority of your mortgage and made upgrades along the way. When the time comes to sell, you’ll likely fetch substantially more than your initial investment. The best part — that money is yours; not the banks.
Low Loan Rates
The past decade has been a great era to purchase a home, as interest rates have stayed historically low during this time. Over the life of a standard 30-year fixed rate loan, the difference of .25% can equate to thousands of dollars. Although nothing drastic has happened yet, economists predict a rise in interest rates to help the market correct itself. So buying today can save you big bucks over time.
Renting Pays Mortgage
One benefit of buying a home in a place like Gulf Shores is that your investment can yield income through renting. Being young (and flexible) while living in an attractive vacation spot can assist you in paying the mortgage. And once you pay off your entire loan? Funnel your profits into more rental properties and see your investments come to fruition faster.
It’s important to instill a sense of fiscal responsibility during your youth. Taking on a large investment improves your credit, generates equity, and lays the foundation for wealth. Applying the principles you learn for financing your home at a young age will start you on a path to success.
If you’re looking to buy, sell or lease, contact us today at Century 21 Meyer – Kris Powell.