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Real Estate: One of the Oldest, Most Sound Investments You Can Make

Sherri MonteithThose of us in the real estate industry or those who were severely affected by the latest crash still flinch when we remember the real estate market in 2009-2012. It was bad. Many home mortgages were underwater (meaning you owed way more on your house than you could possibly sell it for); nearly 70 percent of all real estate transactions from 2009-2010 were either a short sale (making a deal with the bank to accept less than was owed on the property) or a foreclosure. Homes were generally in less stellar condition because sellers couldn’t afford to make repairs. If you were selling your home as a short sale, many times, the bank wouldn’t allow any repairs to be made by the seller. If there was any extra money at all, the bank wanted it. Were there some good deals made? Absolutely.

Nearly four years later, we are still recovering. Is real estate still a good investment? Without question. Here’s why.

When you own your home, you are paying something off. Your money every month is going toward something. You’ll either eventually pay it off and own the home outright or you’ll sell it (hopefully) at the right time and make a profit known as equity. With interest rates as low as they are, you’ll likely end up paying about the same for your mortgage payment as you would to rent the same house you own. That being said, you must be smart about it. Like everything in life, there is no guarantee you’ll make money. One of the main reasons so many folks got in trouble five years ago was overextension – buying more house than they could afford. Looking back, common sense should have told everyone they were getting in over their heads, but in the moment, excitement took over. Can I really buy this house? Sure, you qualify! It was as though the day of reckoning would never come. We learned a hearty lesson from this. Lenders first tightened the belt so much it was extremely difficult to qualify for a loan. They overcorrected. That took a good 18 months to sort out. It’s balanced now. Loans are available for those who are truly qualified to make a purchase.

Real estate doesn’t have to be a “buy at rock bottom, sell at the top of the market” adventure for it to make sense. It’s a long-term investment for most of us. Knowing your market is key. Hiring the right realtor to guide you through the process is essential. Don’t overpay. You don’t have to buy at the lowest price per square foot to make a good deal. It just has to be balanced. Keep your home in good shape. Maintain the proper insurance to protect you in case of a hail storm or high winds knocking a tree down, etc. Keep up the landscaping, the paint and the general maintenance of your home. Protect your investment.

There are very few, if any, tax breaks when it comes to renting. There are however, numerous advantages for the homeowner. Make certain to seek accounting advice from your qualified tax professional.

Again, you have to be smart while making a real estate investment and typically, it’ll be a longer-term investment for most. Not only will you have the tax benefits of ownership, but your money is going toward paying off that home that you will either own someday or sell for a profit, if you’ve been wise in your purchasing decisions.

No investment is a guaranteed money-maker, but real estate will always be one of the most steady, sound investments one can make.

By Sherri Monteith

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One Response to Real Estate: One of the Oldest, Most Sound Investments You Can Make

  1. Judy Shunk March 29, 2016 at 8:55 AM #

    Well said, Sherri Monteith. Your expert knowledge has gotten you where you are.

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