In general, if you’re buying for the long term, then market cycles matter less as compared to buying for a quick fix and flip. Many millennials and Generation Zers are making the leap. In a recent report, the National Association of Realtors said 34 percent – the largest share of all home buyers – are 36 years and younger, and a whopping 66 percent were first-time home buyers!
Unlike a mutual fund, you can’t buy real estate and passively let it grow. Consider your real estate strategy. Start by asking yourself if this is just “a goal” or if you are trying to build wealth.
If you are looking at housing as a long-term investment for capital appreciation, look to generate 13 to 15 percent returns annually or have cash-flow properties that generate 6 to 8 percent per year. If you do a short-term fix and flip investment make sure it can generate returns even after an additional 20% of unforeseen expenses.
Weigh other potential upsides such as the tax benefits of having mortgage deductions, diversifying your wealth base, generating income or long-term capital appreciation for your money and hedging yourself against inflation, as home prices move with inflation.
Along with the rest of this article, you will receive 3 other articles completely FREE including: “Go Big and Go Home: 6 Tips for Upsizing With No Regrets”, “The Top 3 Things to Consider When Moving Closer to Work!” & “5 Questions to Ask BEFORE Hiring an Agent”