HOUSING NEWS REPORT
ATTOM DATA
MONEYOUT OFYOUR POCKET So is owning a home for your primary residence a good investment? To answer that question you need to understand that your personal property takes money out of your pocket each month. Every month you have to pay the mortgage, insurance and property taxes. Even if the house is paid off you are still spending money maintaining the house and pay- ing your taxes and insurance. The house is still taking money out of your pocket, not producing income. While your paid-off house might make your net worth look good, the equity is locked up in the home. If you actually need to access that money, you either need to refinance or sell the house, and then you are back to having mortgage debt or looking for a place to live. A growing numbers of Americans — millennials, baby boomers and Gen-Xers
largest investment most people will make during their lifetime. Many purchase homes with the hope that the value will appreciate, and they will be able to build a sizable amount of equity, sell one day and live off the proceeds after investing in a 1 percent Certificate of Deposit (CD). HOMEOWNERSHIPTOUGHER INHIGH-PRICEDMARKETS While homeownership is great for some, there are segments of the popula- tion which find that renting a home and investing instead in income-producing real estate is a better financial decision. In many areas of the country, home prices are reaching unaffordable levels for many homebuyers, especially in California. According to an article in the Los Angeles Times, California’s median
home price is now $537,315, reflecting a compounded annual growth rate of nearly 10 percent since 2012, according to real estate website Zillow. During the same time period, the median rent for a vacant apartments jumped an annual rate of nearly 5.5 percent to $2,428. As a result of rapidly increasing hous- ing costs in California, more people are leaving, according to a study conducted by Beacon Economics and Next 10, cited in the LA Times article. In 2016, 41,000 more households left the state than moved in, according to the study referenced in the article. What this means is that people need a place to live no matter what the econ- omy is doing. Unlike the commercial, retail and industrial real estate markets, the residential rental market (in many areas of the country) is less likely to drop as far down.
Five Financial Benefits of Owning Residential Real Estate Investments "MY TAKE" ARTICLE FROM ATTOM DATA SOLUTIONS.
by Glenn Hamburger
F
An important part of many people’s financial plan is the home they live in. The choice between buying a home and renting is among the biggest finan- cial decisions that many adults make. But the costs of buying are more varied and complicated than for renting, making it hard to tell which is a better deal. Owning a home is potentially the
or the last 25 years, I have been helping families and individu-
process, there are several areas which should be discussed. When it comes to investments and cashflow, many financial planners will focus on the Equity, Bond or Alternative markets, but I feel it is important to also be aware of the power of investing in cash-flowing residential real estate in areas of the country which make sense.
als identify goals, establish a plan and determine a clear vision of their finan- cial future. While a financial plan is a future road map that is normally put into writing, it is also a guideline that is used to track results, and make adjustments when needed. Since this is an ongoing
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