A few years ago I was asked to speak to a youth group about real estate, the benefits of owning it and the process of purchasing. The average age among these young men and women ranged from 21-30 years old. As the evening progressed I realized that most had no interest in purchasing real estate because they thought it was out of their reach in their current life status, and a few had the very strong opinion that they should not buy real estate, that it would never really be an advantage to them. By the end of the evening I was able to convince all but the most hard core, that buying real estate was not only within their grasp, but was truly an advantage in terms of beginning the process of accumulating wealth. I spoke with passion as I shared my testimonial concerning real estate as an investment vehicle because I had lived a life investing in real estate way before I ever became licensed to sell. Through the years, I have watched many poor but entrepreneurial people start from scratch and eventually accumulate a grand nest egg because of their real estate dealings.
This month is National Home Owners Month, celebrating home ownership, which ownership has been the financial spring board for most property owners who have invested in real estate at any level. Most people who purchase a home soon find that they can create equity by doing fix-up work to the property or by adding bedrooms in an attic space or basement. Added to the principle payments they make, within a few short years of ownership this “sweat” equity can be the nest egg that allows them to move upwards and onward toward an even better investment. While some people get stuck because they overpaid in a hot market, time usually heals that mistake when inflation eventually overcomes their deficit.
There are some specific tax advantages to owning a home, including, mortgage interest deduction, deducting property taxes, and capital gains exclusion. I hate to admit it, but the federal government has done something that I can applaud! It is proven that home equity provides the single largest source of savings and wealth building for Americans. That fact is worth of promotion! If you need help getting started, (even if you have not scratched too many pennies together yet), go see a real estate professional who can coach you how to start the process. You won’t be sorry!