First-time homebuyers often focus on two things: the price of a home and the monthly payment they’ll be bound to after purchasing it. This is quite understandable. However, there’s one more thing you need to consider when buying a house: the future value of the property.
In a nutshell, appreciation, or the increase in prices over time, is how a majority of wealth is built in real estate. That’s why homeownership is a great, stable, long-term investment.
There are ultimately two ways to take advantage of your home’s equity: actively and passively.
By paying off a mortgage during your working years, you actively eliminate a big expense from your plate during your retirement years.
What’s more is that if you’re not great about having a savings plan, owning a home is a great opportunity to passively create a financial cushion that renting can’t. If you start when you’re young, it gives you a longer opportunity to create wealth.
Now, owning a home doesn’t necessarily guarantee that you can have a greater net worth, but homeownership has traditionally been one of the most stable opportunities to build wealth. Obviously, real estate values do fluctuate over time, but it’s still a great vehicle for stable growth for many people. It gives you an opportunity (and a structure) to build wealth. After all, a home isn’t just four walls that provide you shelter—it’s a place for you to grow.
If you’re interested in buying, selling, or investing in real estate, feel free to reach out to me. We’re here to help you make the right moves every step of the way. I hope to hear from you soon!