90% of millionaires are created through real estate ownership.
People live where they do because it supports their lifestyle, whether it’s rental or with ownership. 63% have chosen ownership believing it offers more freedom and a chance to build equity and wealth.
With mortgage rates near 7.5%, many people are discussing whether they should rent or own, stay in their present home with a low mortgage rate, or make a move even though the rates are higher.
According to a Black Rock report, the average appreciation of a home is 3.8% annually over 30 years. That means a house will be worth 3.2 times more in 30 years than when purchased. The average priced home in the Sioux Empire is about $350,000, which is $1,120,000 in 30 years, or enough to be ranked in today’s top 5% wealthiest Americans.
Not surprisingly, an average retiree’s home represents 30% of their wealth when it’s free of mortgages, and in many cases it’s more than 50%. This suggests it’s smart to buy as much house as you can afford early in life, pay it off quickly, and maybe buy a rental property as well.
Residential property is the best investment path, and single-family homes are the easiest to buy and sell in comparison to other types. Although, it’s important to know it requires capital reserves, and/or your labor to maintain the property, plus a mindset of long-term investment. The plan should include getting enough rent to pay the mortgage in full plus any cost of maintenance or improvements within 30 years, setting up monthly revenue or an asset to sell.
All in all, real estate, regardless of current market conditions, is always a good purchase in the long run. And without question, your home will continue to give you shelter, joy, and memories, all while building wealth for the future.
Ask yourself this simple question, “are you willing to put your life on hold, or ignore an opportunity, because rates are higher than they have been?”.
We invite you to call or text anytime, 605.359.4100.
Tony Ratchford, licensed Broker, Author, Coach, Manager, and Sales Consultant