Housing Market Report: The U.S. Housing Market and How to Benefit in 2019
The housing market is something many think they know something about – but most lack a proper understanding.
The American dream is owning a home, raising a family, and saving for retirement. However, the housing market can be one of your most considerable wealth-creating assets if used correctly.
There are several ways to use the housing market as a wealth-creation tool, and this article will detail a few methods you may take with you on your financial journey.
Home Ownership Creates Familial Wealth
Starting with the most apparent wealth creator is owning a home. You save and work hard to have the chance to own your own home. However, the issue is for many, it never becomes an asset.
According to a recent National Association of Home Builders report, the average first-time home buyer spends 11.4 years in their home, while precious owners purchasing for a second time spend 14.8 years. With a typical mortgage lasting 30 years, it’s often difficult to build equity.
To turn your home into an asset, you may want to do the following:
- Instead of a 30-year mortgage, seek a 15-year one to help you build equity more efficiently and save you in interest expense.
- Make a sizeable down payment. Doing so will limit the amount you need to finance.
- When making your down payment, ensure it exceeds 20% of your home’s value, avoiding the need for PMI or private mortgage insurance.
“Flipping Homes Still En Vogue for 2019”
Many of you have seen one of the modern renovation or house-flipping shows thanks to reality television.
While the show makes it look easy, it can be stressful, and knowing what you’re doing is important. Even still, it’s a powerful way to build wealth or assets.
When flipping a home, you want to ensure the asking price for the property is below fair market value from the start. This arbitrage will allow you to have breathing room during the flipping process. You’ll likely freshen up the house from there with new paint and other cosmetics.
Lastly, you will sell the cleaned-up home for a higher price and keep the difference as a profit.
If done correctly, you can generate tens of thousands of dollars.
Why is Everyone Renting in 2019?
Lastly, if you have multiple properties and don’t want to sell them, consider renting them out. Renting out your properties can cover their mortgage and reduce the principle.
That additional incoming cash flow can then go toward building your portfolio.
On the other hand, if you are a consumer looking to rent, this can be a cost-effective way to feel what it’s like to own a home without all the risk involved in actually owning the home.
These are three effective ways to benefit from the housing market financially.
Remember that your home should be one of your most substantial assets and, if purchased wisely, can quickly become the asset that allows you to buy more properties in the future…