The moment you find yourself having to wait out an investment, it’s usually time to cut your losses and get your money back. The opposite, however, applies to real estate investing. This is because on a long enough timeline, real estate prices will appreciate (generally speaking).
Unless you have made an incredibly ill-advised real estate investment during a real estate bubble or blindly purchased a piece of land, real estate investing is a safe vehicle for your money. Not only will it yield a moderate ROI, it allows you to save for yourself what you would otherwise pay on rent.
There are exceptions to every rule. Obviously there was the real estate crash of 2008 and the Recession of 1990. But even these significant lulls in the economy witnessed eventual recovery. The hardest hit regions in the country, such as Florida, Arizona and Nevada are witnessing stabilizing real estate prices after only 6 short years. Many of the homeowners in these areas- those who didn’t bail or short-sale their properties- are even looking to get the full value of their mortgage in about another 5 years.
In the rare event your real estate value doesn’t appreciate, you can always depend on the forced retirement plan that comes with owning a piece of property. As you pay off your mortgage, your liquid asset- or equity- in the property increases. And when the mortgage is finally paid off in 15 or 30 years, the entire value of the house is your own asset.
Ideally, by the time you pay off your mortgage, the cost of the property would have increased in value anywhere from 20-45%. And the likely worst case scenario is your mortgage acts as a savings account. Either way, you’re not lining a landlord’s pockets and ensuring yourself a secure and stable future.
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