Wednesday, March 05, 2008

Real Estate, A Good Investment

According to a recent Merrill Lynch Economic Report, the prices of homes have not decreased, as some may believe. In fact, real estate prices have increased 60% since 2000. If you've owned your home since then and are worried about the return on your property, have no fear because even if prices do decrease when it's time to sell, you'll still be ahead. If you're thinking about purchasing a new home in the current market, keep in mind that real estate is one of the few investments you can make using leverage. This means you can put 10 to 20% down, yet your return is based on the full market value of your home.

In the past eight years, the S&P 500 report has only declared a 1% per year return, despite stocks doubling in the past five years. It's important to think long term when it comes to the value of your investment. Real estate investments have provided larger returns in the same amount of time. Also, consider the "use" benefit of owning a home compared to owning stock. You'll be able to tangibly enjoy a real estate investment. You probably can't make fond memories with stocks, but owning a home provides the opportunity to create traditions and a place to call home.

Finally, considering the recent drops in interest rates, now is the time to buy and lock in a low fixed mortgage rate. It may be tempting to wait for the rates to drop more, but there is a chance you will miss out. Nobody can accurately and consistently predict the market. Investing now, while you know you have the upper hand, will provide you with a comfortable interest rate you'll be happy with. If you've owned your home for more than two years, you may want to consider refinancing. Especially if you have an adjustable rate mortgage, securing a low fixed interest rate can help ensure the stability of your financial future.

Rest assured that your decision to a buy a home is the right decision, and be confident in your investment!

Contact me for more information.

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