How My 2008 Real Estate Purchase Is Making Me Rich
By Jason in Advice, Business, Just for Fun, Motivational, Personal Life | 2 comments
If you have followed my blog in 2008 you will know I purchased my first single family home back in April. I owned a beach condo before this but nothing compares to having my own place with a yard, garage, no neighbors, etc.
But I digress! Back in April 08′ I thought the real estate bubble had already burst, but the way I see it prices are still dropping around the country and especially here in Massachusetts.
I still got a great deal on my home, and I think as time passes into 2009 and beyond my home, and most others in my area will again begin to appreciate. I view real estate prices like I view the stock market. There are always ups and downs, and more recently downs, but overall all in the big picture, the arrow keeps going up.
So I’m not too worried, in fact I have taken advantage of this situation for my own personal benefit. Let me explain. I recently read an article on Yahoo! about how now is the perfect time to make improvements on your home.
Here’s why… when you make an improvement you force your home into becoming more valuable. Like for example I just finished my basement and added 800 more square feet to my house. That increased the value of my home tremendously.
The really cool part is that the world of contractors is cut throat. There are so many hungry contractors out there looking for work, they are drastically reducing their rates in order to get more jobs.
That’s how I have used the bad economy to my advantage. I’ve made home improvements that increase the value of my home, paying for materials of course, but also paying only a fraction of the cost for labor than I would have paid say a year ago.
I have also added granite countertops, added a new bedroom above my garage, added a gas fireplace instead of wood, and a few other small things. I know in a few years when or if I go to sell, I am going to do well.
Think about it, I bought the house for nearly rock bottom price, I made improvements on my home on the cheap, and soon my home will again begin to appreciate. Barring a natural disaster I am set. Put bluntly, when or if I decide to sell in a few years, my check at the closing table is going to be for multiple 6 figures.
That’s the beauty of real estate. I urge you to maybe see what you can do to improve your home and take advantage of others bad financial situation. I don’t mean that in a bad or mean way. I mean it’s business. It’s the business of taking care of yourself and your family for now and for the future.
And if you don’t have a home? Wow are you in a GREAT position. There are so many desperate sellers out there, so much selection too, you can easily go out there and find yourself an absolute steal of a deal. Get a good deal now and you can really set yourself up nice for life.
That’s all, life is short, always go for it. Good luck!
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Jim Parsons | Nov 5, 2008 | Reply
Hi Jason:
The plan you outline is the same plan everyone who has a house has in mind. Mortgage payment = equity, as opposed to rent payments.
Today’s market has taken such a bashing that other factors have entered the scenario.
Job lost = fewer potential buyers. Nest eggs are required to survive.
Mortgage money is almost as hard to find as your first family doctor.
None of this changes the fact that he who can afford to acquire and hold his own property is making a wise investment, but, even if the market starts to rebound in 2009, potential buyers will not.
The employment opportunities must be there. Salaries must be high enough to meet every day needs and leave a surplus to accumulate down payments.
From the way that everything, especially rents and food are going, that will be quite a challenge.
My electrical services are up this year, heating coses (gas) are projected at a 20% increase and the tax man sent me a nitice yesterday to the effect that an evaluation of my property indicates a 33% in market value over the next four years.
That last gem is to let me know that I can look forward to a respectable hike in mt tax assessment.
It is true that my property is going to increase in value - but - unless the purchasing power of the folks in the market place can handle it - at any price - I look good on paper.
If I have to move, and this has happened to me in the past, you have to live with whatever the skill of your sales person can drum up.
That wee emperilcal evaluation from nearly 38 years of hustling from pillar to post due to the requirements of my employment.
Jim Parsons
http://www.learntolive.info
[Reply]
Jason | Nov 6, 2008 | Reply
Hi Jim,
You do raise a good point…. I can have the best house in the world, but if there are no jobs and a healthy economy theres no buyers.
I do believe in the next couple years that we will again see a boom in employment, jobs, stock market, real estate.
Right now we are in a down time, and i think with the new leadership here in the U.s. things will change for the better, it will take time, but they will chance.
So I still think real estate right now is a good investment, and if you have good credit you can still get a mortgage for a fair rate.
The buyers will once again show up and make this a sellers market, all’s we need as home owners is a little patience.
Thanks for reading by the way, I appreciate it.
Jason James
[Reply]