Buying vs. Renting – Building Wealth Through Real Estate

 

It is sometimes said that real estate is a great investment. Sometimes people equate this fact to owning property and earning rental income, purchasing land and developing it for commercial and residential real estate ventures, or the value of land or property as it appreciates over time.

According to the a report released by the National Association of Realtors, on average, homeowners in the low, middle, and upper income levels nationally accumulated $98,900, $122,100, and $150,800 in wealth by owning their own home. Putting aside the equity earned while making mortgage payments on a home that you own, as well as the interest that can be written off for tax purposes, the benefits of

owning vs. renting translates into actual accumulated wealth, according to this report.

The report by the National Association of Realtors focused on the “built-in” wealth of home appreciation. The amount of equity in a home that appreciates in value over time automatically adds money to a homeowner’s portfolio. Specifically, around the state of Louisiana, the low, miiddle, and upper income homeowners in the New Orleans-Metairie metro areas accumulated $41,110, $75,030, and $75,680 respectively. In Baton Rouge, low, middle, and upper income homeowners achieved an additional $60,020, $73,500, and $102,980 in additional personal wealth.

Owning a home has so many more benefits than renting because all of the money put into the home and the payments made on the homes is money working for you. In the West St. Tammany Parish area, rents and mortgage payments are now closer in price than ever. Consider purchasing a new home for sale or building a custom home. If you’re ready to begin, Contact Us for a Consultation Today!

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Residential Real Estate Investing Tips & Tricks

They say that investing in real estate is one of the most secure investments you can make. However, many people who have heard this adage and are used to working within the investment system of stocks and bonds can be unsure as to how exactly to go about investing in real estate.  Below are some tips on how, when, and where to begin the real estate investing process.

The first thing you need to do is to make sure that the timing of your investment is right.  For years, since the Recession, and slightly before the Recession, interest rates have been at record low and historically low rates. In fact, interest rates are still at low levels compared to the lifelong statistics of interest rates, so now may be a good time to invest in real estate.

The next thing, as an investor, you need to consider is the health of the market in which you are investing.  The way to tell about the health of the market is the stability of home prices, economic opportunity, and employment rates.  Many investors will start with what they know, in an area that they know.  This sometimes means checking out the opportunities around where they live.  Once an investor has taken the plunge on real estate investment, the same formula can be applied to other markets while doing research.

Simply said, areas in which there is strong economic growth, new commercial construction with chain box stores of new chain restaurants being built in an area, that is where residential real estate may soon move in.  The economic studies done by these big companies indicate the opportunity for growth of people and jobs, which will bring them the business and eventually the home buyers.
Another way to tell if growth is happening is the employment rate of an area. The more jobs offered and the more businesses cropping up, the higher the employment rate. Jobs bring people who need to rent or buy homes, which indicates a great place for real estate investment.

Once you have considered the economic and employment factors in residential real estate, the next thing to do is to find the actual real estate itself.  If you are skilled at construction and renovations, the more profit you can make out of a home that needs a little TLC because the cost of buying and “flipping” the home in a sale will be lower for you if you don’t have to higher a construction manager to do the work.  If you don’t have this skillset, you might want to consider a home that might be in foreclosure or a bank-owned home which doesn’t require a lot to get it sale ready.  Looking for deals where you can purchase a house for much lower than appraised value is the name of the game here.
So, wherever you live and whatever your skills, as long as you have good credit, money to invest, and even potential investment partners, there are opportunities to invest in residential real estate is the market conditions are right.

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