Build Wealth Consistently Using Real Estate
Dated: August 20 2022
Views: 231
How to Build Wealth Consistently Using Real Estate
A little over 10 years ago, our country was dealing with one of the worst economic crises of the 21 st century, and it felt like the market would never recover. In 2020, 5.64 million existing homes were sold according to data from the National Association of REALTORS®. 2021 will be defined by low interest rates and low inventory which will continue to push home prices higher. This is creating opportunities for massive amounts of wealth to be built in real estate, and by ordinary people like us. Appreciation or the rising prices of homes over time is how many people build wealth through real estate. Appreciation combined with leverage offers large returns. If you are buying an investment property in which you are collecting rent, you are making a profit on the amount leftover after making the mortgage payment and covering all other monthly expenses. That will continue to build as you pay down the mortgage and over time, means more money in your pocket. Depreciation is a tax benefit that gives you the ability to write off part of the value of your real estate every year. This can reduce the amount of taxes you pay on the money you make, which means real estate can actually protect your wealth. Check with your CPA to learn how you can benefit from this. As you pay down your mortgage or improve your property, you are gaining the ability to leverage the wealth you have created. The safe way to leverage is to have a positive cash flow. If you leverage property by borrowing less than you make each month, that is a positive cash flow. Inflation also plays a significant role in why real estate builds wealth so consistently over time. As the value of money decreases, the price of goods and services increases. The use of inflation to build wealth in real estate relies on the consistency of your large expenses. Your mortgage and property taxes, for example, stay fixed for the majority of your ownership of the property.
Joplyn Roberts Kim, Realtor
Cell: 228.424.4377
Office: 228.357.5888
Brittany Geotes
Brittany and her husband, Andrew Geotes, own and manage NextHome Simplicity and their real estate photography company, UZZI Media. After seven years of university, Brittany became a Realtor in January....
Latest Blog Posts
New Construction vs. Existing HomesDue to the national housing shortage, many buyers are choosing new construction over existing homes. In this hot market, many buyers find themselves in
At NextHome Simplicity, We Go Above and BeyondBuying or selling a home is one of the biggest life decisions you’ll ever make. Choosing the right Realtor to represent you in this fast-paced
Bay St Louis vs. Ocean Springs These beautiful beachfront communities are on opposite sides of the MS Gulf Coast but offer very similar amenities and tourist attractions. More importantly, both
MLS United® - All information deemed reliable but not guaranteed. All properties are subject to prior sale, change, or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.
