“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” -Andrew Carnegie
The truth is, you’re already paying a mortgage. Its just not your own. Also not my own quote, but it brings the flames.
Let that sink in for a minute. You’re paying rent right now and that rent is paying your landlords mortgage. Doesn’t it make more sense to get rid of the middle man and start paying your own mortgage. Because at the end of the day all things being even, we all want flexibility and freedom, and wealthy people own real estate. Here are a few advantages of owning instead of renting.
1. Rent Increases: When you get a mortgage, you are locking in your monthly payment for the next 30 years. But when you rent, your landlord is likely going to increase your rent year after year. It might seem like a lot now, but in 5 years from now when all your friends are renting a few hundred bucks more for the same size house, you will be patting yourself on the back.
2. Appreciation: As prices continue to rise, you get to experience the gain in appreciation from what you purchased the home for compared to what the new value of the home is over time. This could be a huge amount of money. I’m talking $50,000 to 60,000 over just a few years. This can be a part of your retirement strategy, nest egg, or you can borrow against the home if you ever need extra money. Renting doesn’t give you those options.
3. No Down Payment Options: There are loans available that can get you into a home for zero down. So you don’t need to save up 20% before you can afford to buy a home. The barrier of entry is small and the cost is making up your mind and having some guts to go for it.
4. Tax Benefits: There are several tax benefits to buying a home. You can take your settlement statement to your accountant at the end of the year and write off mortgage interest and property tax payments in some cases. This can be a huge savings to you year after year.
You might know all of this already. Or this might be new information. Either way, let this be the moment in time when you stopped living passively and you started making passive income. I just made that up on the fly and I think thats going to stick.
Owning homes has made me more money than I could have dreamed of making in a year during high school. I bought a killer property, but that home has appreciated 6 figures since I purchased it just a few years ago. Plus, once I moved out, I’ve been able to make $800/month positive cashflow from renting.
I hope this motivates you begin to research and discover all the amazing opportunities afforded to you in Real Estate. If you have any questions or feel like this is just above your head, reach out to me and I will sit down with you for an hour and explain the X’s and O’s. You can do this. Just because they didn’t teach us this in school doesn’t mean its a pipe dream in the sky. Lets get the bread.