When my husband and I bought our first home, we didnt really have our financial future in mind. We were going to be getting married and needed a place to live. After 4 years of college and sharing dorm rooms and rental houses with friends, we knew that a lease wouldnt work for us. Without any financial planners advice, we instinctively made one of the best financial decisions of our livesOne that would affect our bottom line net worth for years to come. Recently, I got together with four single women friends from high school. It was interesting to see how their financial paths differed over the past 20 years. All four started out with similar degrees from four year colleges. The four started with similar salaries but in different industries. The two gals who purchased their homes were doing much better economically than the two who continue to live in apartments. As a Realtor, this intrigued me and I decided to look into it a bit further. Homes are Smart a Investment for Anyone According to the Federal Reserve Board, VIP forum, your net worth is directly tied to whether you own or rent a home. The statistics are astounding. According to consumeraffairs.com, the national wage for the average American worker is $40.409. Their statistics show that the net worth of a family who owns their home with an annual income between $30,000 - $50,000 is over $126,000. Compare that to a renter with the same income and their net worth is in the $10,000 range. If an average American owns his/her home, chances are that his/her net worth will be 12 times higher than your renting coworker. Even at a low income, you can have significant net worth, if you own your home. Stop Increasing Your Landlords Net Worth With every rent check you send in, your landlord gets a little richer. And you dont. It is that simple. Many young single people are waiting for the right time to buy a home. Single women dont want to buy a home and put down roots until they are in a permanent relationship. Single men dont want feel tied to a house or community. This is old-fashioned thinking. The mortgages products offered today allow almost anyone with a stable income to purchase a home. Whether you are married or single, man or woman, the earlier you become a homeowner, the more financially stable you will be. So what does this mean to the average American? Dont wait! Are you a college student? Consider buying a home near campus and rent out rooms to other students. Your renters will often pay your mortgage! Single with limited funds? Start small and consider roommates. Remember as a homeowner, you will be responsible for maintenance and repairs so figure all costs into your budget when making your decision. Think you may relocate soon? If you wont be staying in the area for three years, it may be best to rent. If you currently live where the rental market is active, you may want to purchase and keep as an investment if you have to move. Be Smart! Treat Homeownership Like an Investment Maintenance is essential for your home to accrue in value. Periodic updating and basic home care is required. You have to keep the gutters clean and the roof in good repair. The heating system needs to be serviced and the exterior painted or stained to avoid weather damage. A good home repair book will give the first time homebuyer a guide to the routine maintenance required for your home. Of course to continue to accrue net worth, this does mean that you need to keep the equity IN the home. Avoid enticing offers to refinance with 0% down so that you can take a vacation or buy a new car. Using an equity loan can be beneficial to you if you are using for home upgrades, remodels or to purchase a second home for recreation or investment. Want to learn more? Contact a Realtor! In most states, the buyer doesnt pay an additional fee to use a Realtor. Sellers traditionally pay the Realtor fees. And the advice from an experienced real estate agent can be invaluable to find the home that best meets your needs and situation. Copyright 2006 Teri Eckholm |
