Wealth Building with Real Estate
Wealth Building with Real Estate
Full Video Transcript Below
[00:00:00] Well, good afternoon, real estate fans Alice Lema here again. I'm a broker at John L Scott here in Southern Oregon, and this is our weekly podcast. And this week we're going to talk about wealth building through real estate. And it's a fourth quarter 2021. Our numbers are starting to come out for the first three quarters.
[00:00:18] This is a great time to talk about five things that happen when you buy a property, if you own a house. And so before we get started on that, want to give you a quick second to like the channel, give us a thumbs up, leave a comment, share with your friends. This is an educational broadcast. Want to make sure it's doing its job. Also want to let you know I'm around all weekend. If there's something I can do to help you with your real estate, just reach out and we'll make it happen.
[00:00:43] Okay. So here we go. Wealth building through real estate, five great things that happen when you buy it. So the first thing I want to talk about is something people don't realize till after they buy, like a year later, they realize that their household budget, especially for a dwelling, if you will securing a dwelling has stabilized.
[00:01:06] So when you have a 30 year mortgage, You have stabilized the amount of money you're spending on taking care of your housing. So over the decades, incomes usually go up. So for 30 years, or however long you own that home, you're income cango up, but your principal and interest rate don't. So that's a really nice.
[00:01:30] Nice thing to have happen in your monthly budget, you stabilize your household income with that. Your regular income generation typically goes up, especially in the course of 20 or 30 years. And you have that nice cushion over time. So that's something people don't always think about when they purchase a home. So number one is locking in an interest rate for 30 years while your income goes up for 30 years. Creates a nice stable household budget.
[00:02:03] Number two, the one we always talk about, equity buildup and you know, we just, through the COVID saw all this equity built up over the last 18 months. In fact, we have a new map we're going to put in the podcast that just came out from core logic. One of my favorite favorite website resources. So CoreLogic came out last week with this map. And it said that in the United States, homeowners averaged $51,000 each in equity. And what that means is the difference between what they owe on the property or what they paid, if they paid cash between that debt or that initial purchase and what it would sell for or refinance. Now that difference is called equity.
[00:02:49] And so in the last year, CoreLogic look at the map, you can see state by state homeowners averaged $51,000 each in equity. Now nobody says that's going to happen every year. Do not get used to that. Okay. But it's just an extreme example of what happens when you own real estate.
[00:03:11] And so over time in a neutral, normal, stable, appreciation, depending on your market can be anywhere from 3% a year to seven, sometimes 9%. And again, it depends on supply and demand, but a normal stable repeatable market will have that three to seven ish kind of annual equity appreciation. So equity buildup is our number two. And it's, it's just a beautiful thing for those of us that owned property over the last few years, but it can be a beautiful thing for you too. Even if you don't own it yet, you can still get some. Okay. So that was number two.
[00:03:50] Number three security, so renters, tenants are sometimes vulnerable depending on their landlord. If you're in an apartment and somebody sells the building, that's different than if you're in a house or a cottage and somebody sells a building. So there is a vulnerability of being displaced or being asked to vacate as a tenant. So my number three is just lifestyle security. Homeownership creates that opportunity for you to make decisions about whether or not you move. And that is also a beautiful thing.
[00:04:26] Number four, the ability to use the equity to purchase more properties. So as you gain more of a profit, if you will, in any individual asset you can reasonably, we recommend reasonably access that profit and use that to buy a second property. So it can be an investment property. It could be a second home, something like that.
[00:04:50] But the idea is with caution and reasonableness to access that equity, that profit and use it to build wealth with quantity of real estate. So that is one of the great things that happens when you start buying properties and you don't sell them. Number five. The ability to use that same equity to income generate.
[00:05:14] And this is against the thing, people don't quite realize when you purchase a property, you may be in a position to start a home business. Look at that that's income generation. You may be in a position to rent out some rooms. You could add a cottage and rent that out. So when you own real estate, it gives you opportunity to leverage that real estate.
[00:05:36] Maybe financially, maybe just physically leverage it to income generate and make your life more profitable, more secure and build wealth over time. So those are my five great things that happen when you buy a house, when you buy property wealth building through real estate, it's one of my favorite things to do. And one of my favorite things to talk about.
[00:05:57] So give me a call, give me a text. Let's talk about how we can use real estate to generate some wealth building in your life or in the life of someone you love. My number is (541) 301-7980. You can call me, you can text me. And you can also go to my website, AliceLema.com.
[00:06:16] We're here to help hope you have a beautiful weekend. We'll see you next week. Bye now.