Why real estate is a great investment
Why is real estate a great investment?
If you look at different ROI (Return on Investment) scenarios and which of those ROI scenarios would have made you the most money from January of 2000 through June of 2010, purchasing a home would have been your most savvy investment. If you had invested in the DOW, your Return on Investment (ROI) would have been -9.9%. If you had invested in the S&P, your ROI would have been -19.1%. The Nasdaq would have been -46.4%. If you had purchased a home in January of 2000 in
Why real estate is such a great investment right now!
According to the Case Shiller Price Index,
Therefore, if you purchased a home today, you would be paying the same as you would have in 2004. The biggest difference is that the cost of that home today is much less than it would have cost you in 2004 due to lower interest rates. For example, if you purchase a home in May of 2004 for $400,000 @ 6.27%, which is where interest rates were during this time, it would cost you $2,468.07 (Principal & Interest). If you purchase that same home today at 4.75% your P&I payment would be $2086.49 thus you would save $381.48 per month! This is a huge savings for most of us. Therefore, the price is the same it just costs less.
Interest rates are at an all time low. This means you get to buy more home for each dollar invested. For example, if you compare interest rates at approximately 4.5% vs. 6.5%, you have approximately $75,000 more purchase power on a $320,000 home thus allowing you to purchase a $400,000 home! In the
If you are currently in the market to purchase a home in