If you’re a first-time homeowner, you may be thinking about some possible ways to make the most of your newfound capital.
Selling your Salt Lake City home? Get a free home value report
Buying a Salt Lake City home? Search all homes for sale
I think that buying real estate is one of the best ways to increase your net worth. If you’re a first-time home buyer, it’s important to have a strategy in place that will allow you to invest your money in areas where it will not only grow incrementally but where it will compound, as well. There are a few reasons why buying a property will increase your net worth:
- Purchasing a home acts as a forced savings plan. A study done by MarketWatch stated that 62% of Americans did not have $1,000 in savings to cover potential unexpected expenses. In a world where many of us can easily become strapped for cash, it’s important to put money away wherever and whenever we can, and a home is a perfect way to do that. You may be paying money on your principal and interest each month, but consider how much you’ll be gaining in the long term. I know that a lot of people really love the idea of flipping houses, but your goal should not be to buy a home, fix it, flip it, then go buy a boat with the profits; those profits should go toward a long-term hold.
- You’re utilizing the market and its advantages. We are seeing some of the highest rental growth rates yet, so if you’d like to buy, hold, and lease a property, now would be the time to take advantage of those rates.
- You will have certain advantages as a homeowner. Talk to your CPA and find out which advantages you’ll have as a homeowner. In cases where there is an accelerated rate of depreciation, you may be able to make improvements on that property and not only reap the benefits of a strong market, but raise rental rates when the market declines as well.
If you have any questions to increase your net worth through real estate, feel free to give me a call or shoot me an email. I look forward to hearing from you!
