What the experts say about owning a house: 3 unexpected benefits
These are the first time home buyer perks no one's talking about. Buying property has almost instant results and could change your financial future.
Taking cues from the success of others can be something worth considering. Brent Sutherland, a real estate investor and Certified Financial Planner, has seen his success pick up speed. In a recent Business Insider piece, he shared three lesser-known tips on the reasons to own real estate.
3 ways homeownership helps you play the long (and short) game
According to Sutherland, by owning real estate you could:
1. Diversify 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 discusses more in-depth the advantage of multiple income sources, including those you can get from real estate investments. Having these investments means you may lean less on your day job later. Sound like a dream come true? It's possible. When you buy a home strategically, your real estate investment could eventually grant you more time and financial freedom — making room for travel and other future goals, especially as you enter retirement.
2. Get almost-immediate gains.
"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."
Housing values have been appreciating in every price range. CoreLogic's late-2019 Home Price Index showed a 12-month home value projection of 5.6 percent, up from the 4.5 percent seen that summer. Based on these numbers, the housing market is yielding results right away.
3. Take a shortcut to financial independence.
"If you need $40,000 a year to live, you could alternatively invest in assets that generate an 8 percent 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 has also been called a "forced savings plan." When you pay your mortgage each month, you're building your own net worth by increasing your home equity — instead of contributing to your landlord's investment. This brings you a step closer to attaining financial independence.
Get prequalified in 15 minutes, become a homeowner in 10 days**
Taking just a few minutes to get prequalified may not seem like much, but this simple step is enough to put you in the fast lane. Prequalified buyers are seen as more serious. And, you'll know how much house you can afford so you don't waste time hunting. All that's left? The fun part: Find your dream house and let us get you closed — keys in hand — in 10 days.
About Brent Sutherland: At 35, Sutherland bought his first single house to rent and generate income. Within just five years, he's become the owner of eight more properties, as well as a portion of a commercial real estate project.
