The Real Estate AF Blog - How To Live Better And Build Wealth

The Real Estate AF Blog

How to live better and build wealth through homeownership… using money you're already spending on rent.

Let’s get straight to the point on this. There’s no reason to be long winded or over explain the facts… If you’ve read my pieces before, you know this is going to be hard for me to use just a few words. Here we go.

The fact is that everyone has a cost of housing that they are paying. So how do we leverage that unavoidable cost to help us live better and build wealth? It’s simple really… You can buy a home for little or no money down and you’ll make the mortgage payment with the money that you’re already paying on rent. If you buy something nicer than the piece of shit rental you’re in, you might increase your monthly housing cost a bit, but there’s good news... If there is an increase, it will be offset by the fact that part of your monthly payment will be going toward paying down the amount you owe on the home. That is like having your own savings account, but due to property value appreciation, you stand to earn 10 to 20 times more “interest” on that savings account than a traditional low interest earning account at a box bank. An added bonus is that you’ll also be earning interest on the money that you borrowed, so your gains are ridiculously high while your risk is ridiculously low. Why is your risk low? Duh, you put very little or no money of your own down and you’re simply paying the cost of housing that would have gone into your landlord’s pocket anyway.

Summary

How buying is living better:

• You decide how long you’ll stay there

• You decide how you want to utilize your space

• You can have an effing dog or cat… everyone knows that’s living better

• You can make your own rules, which let’s face it, there are none

• You don’t answer to a landlord anymore because this bitch is yours

• I’m sure you can think of a hundred things you hate about your rental… those are gone

How homeownership builds wealth:

• Appreciation of value means earning interest on someone else’s hundreds of thousands

• Your first home may not be your dream home, but it’ll build equity faster than you can save money and in a couple to a few years, you can use that equity to buy something bigger, better location or whatever it is that you are trying to accomplish

• You’re utilizing money that you’re already going to spend on housing and instead of flushing it down the toilet (giving it away to your landlord), you’re putting a portion of it back in your pocket and earning interest on it.

• You can utilize home equity to make other investments

• You can leverage your property to buy other properties and stick renters in there to pay your mortgage for you… This is just good sense and is a self replicating investment that has endless potential. 

• A really good investment is to buy a duplex, live in one side while putting a renter in the other side who will pay the lion’s share of the mortgage. Manage things right and you can duplicate this every 2 to 3 years and build a massive rental empire.

Written by: Jeryd Smith, Founder of WA Home Hunt and a real estate broker, licensed in Washington State. Is he an idiot or a genius? Who knows, but he is opinionated and that's just what this writing is… his opinion. Nothing more, nothing less.