Real Estate as a Long-Term Investment
When you buy your home, you’re not just buying a place to live; you’re making an investment in the real estate market. There’s good news for homeowners: real estate is one of the best investments you can make, providing a good solid return on investment with low risk. The best real estate investment strategies involve real estate as a long-term investment, so think about how long you want to own your home before you count your investment dollars.
Real Estate Provides Solid Investment Returns
Very few investment opportunities provide the same returns as real estate. Depending on when you buy and sell, you can easily get a double-digit return on your real estate purchase, and real estate is a safe investment. The only other investments that are likely to net you such a high return are high-risk investments, typically in the stock market, where most people wouldn’t want to gamble hundreds of thousands of dollars. If you’re an average family with a modest income, real estate is literally the best investment you can make without risking everything.
Real Estate is a Long-Term Investment
Real estate isn’t a quick turnaround proposition. While real estate can provide early returns if you’re lucky enough to buy in a good market, the majority of real estate investment returns occur after a long period of time in the property. If you’re buying a “starter” house and plan to move in just a couple of years, that home isn’t an investment. You’ll be paying mostly interest that early in the mortgage, and you’ll be lucky to earn a few thousand dollars in equity. If the property doesn’t appreciate, you might not make any money on the quick turnaround.
Where real estate really shines is when you’re looking at 10 years or more. Over such a long period of time, real estate prices historically appreciate, even with fluctuations in the market. You’ve also earned a good amount of equity in 10 years, making it a good return if you do sell your home at that point. Stay in your home until you pay it off, and it’s one of the best investments you can make.
