Real Estate Investing 101: Why Buy Real Estate?

Have you ever talked to an old timer who bought their home when they got married and lived in it for the past 40-plus years. Have you asked how much they paid for it? The increase in value is astounding! Even though we have seen the housing market fluctuate, including the crash in 2008, overall home values continue to rise. 

In the past two years we’ve seen home values jump substantially due to low inventory. Market value has increased between 12%-20% depending on area and studies. Every week we see homes selling for over list price, continuing to push the average home value up. According to a study by the National Association of Realtors, the long-term trend of annual home price appreciation is 4%. Even with ups and downs, home values continue to increase. 

Inflation also plays a huge role here. In 1989 the average home price was $94,000. Last year the average price was $386,900. The change in price, adjusted for inflation, is 67.94% (U.S. Bureau of Economic Analysis).

What all of this data shows us is that homes hold their value and increase in value. It also shows us that investing in real estate is a long game. (We’ll cover flips later.) If you can buy property and hold onto it for many years, that’s when you make the most gain. 

In addition to market value increase, you will gain equity each year. What is equity? It’s the difference between what you owe on the property and what the property would sell for. So each year your debt goes down, but your property value goes up. This means you have more “cash” sitting in the property. In time you can leverage this equity to buy more homes, sell it to use the proceeds for a better property, or take the cash and pay for something in the future (like your child’s college education).

Another thing to keep in mind is that you will be renting this property. You will want this property to “cash flow”, meaning you walk away each month with some money after expenses are paid. Over time rent rates increase as well, but your mortgage payment stays the same.

All of this comes together:

  • Increase in market value
  • Increase in equity
  • Increase in rental rate

Investing in real estate can be very profitable. It’s a great place to put your money. It’s a long game, so the sooner you start the better!


Pricing Your Home to Sell 

What is the big deal about pricing your home right to sell? As a home seller, you may be thinking, “Wow, this market is great. There are so many buyers looking for homes they’ll pay anything! I’ll just mark my price up and see what offer I get.”

Unfortunately, this kind of thinking backfires. Even though buyers are looking for homes, they are pretty savvy and know what homes are selling for. Also, their real estate agent will be checking comparable homes to see what your home should be listed for and how your home compares to other homes on the market.

8 Must Haves for Your “Final Home” Purchase

In all cases, this “final home” purchase feels heavy. There’s a lot of pressure to find the perfect home. Here are some considerations to keep in mind if you are preparing to find your forever home.

11 Summer Fun Activities Within An Easy Drive of Lancaster County

One thing that is so great about living in Lancaster County is that you are a short drive to fun attractions in neighboring counties! There are so many places to visit you could fill up every weekend trying something new. Some of these are my favorites, while others are on my bucket list. I would love to know your favorites!

Is A Multi-Generational Home Right for You?

Multi-generational living is on the rise. It’s not unusual for grandparents, parents, and children to live under the same roof. But is multi-generational living right for you? Let’s take a look at the pros and cons of living in the same home with several generations of one family.

The 2024 Housing Market is Heating Up | Lancaster County, PA

This year’s housing market is off to a great start! Are you a home buyer or a home seller? Are you curious to know the latest 2024 spring housing market stats? Let’s take a look at what’s happening with the housing market both locally in the Lancaster, Pennsylvania, area and nationally. We’ll take a look at home sales, housing inventory, home prices, and other key points.