After settling into adulthood, most people start thinking about their future whether that be starting a family or making important financial decisions, with the idea that they will bear fruits later on. For those fruits to grow, you have to be patient, and impatience can be a human vice especially when it comes to varied risk-reward situations.
Let the record show that we are simply showing you what our thought process is like behind investing money, time, and self, not what is right or wrong.
As a team, The Home Company discussed a few weeks ago the high fluctuation in market trends, notably when the Dow Jones seemed to be drawing what looked like a rollercoaster on the graph in a way that could be counter-productive in producing those fruits we just talked about.That discussion left us wanting to share with our following and clients some important aspects of investments.
We understand that investments are crucial to continue growing with the world we surround ourselves with and quality of life, but being patient and knowing the information is equally crucial. For example, you are not going to take a math test in a class you’ve never taken without studying. Same concept; get to know your domain.
So with a little bit of information, we know and can acknowledge that the stock market is a place with endless opportunities to invest and grow, from one end to another on the investment spectrum. Penny stocks come with low risk and low return. Portfolio investments are more on the high risk high return. Both are smart, both can be easily neglected and lost. No matter what, you are not in charge of the organic fluctuation of these markets, and all you can do is know the information and trust the process.
Let’s move on and talk about Real Estate investments.
These are not to be misconceived as REIT’s (Real Estate Investment Trusts), which are venture-like companies that invest in income-producing real estate and funded by high paying investors.
In our case, we are talking about investing in a primary home, or if you are feeling frisky, a secondary home, which can be a multi-unit or not, for additional income. But isn’t the housing market a huge risk as well? It is, and we saw the outcome of that a few years back, which is why we believe in building trust with real estate teams like ours to be well advised in moments when you collect your fruits, put them all in the same basket, and send them off.
We want you to be able to understand this type of investment without being lost, which is why visualizing numbers and trends are key. To be clear, we will only be showing you numbers that makes sense to people who have invested wisely, but also have been advised wisely.
Let’s keep it singular. We see can clearly see that U.S. homeownership, in the past 27 years, has kept a steady number, which tells us that that if your investment was smart and you were well advised, you most likely will keep your home.
U.S. homeownership rate 1990-2017 | Statistic
This statistic presents the homeownership rate in the United States from 1990 to 2017. The homeownership rate is the…
While those numbers seem balanced, the price index has not. Since 2000, the housing prices have augmented with 2017 being at the highest it has been. Even through the 2008–2010 crisis, prices were still higher than in 2000.
U.S. Case Shiller National Home Price Index 2017 | Statistic
This statistic presents the values of the S&P Case Shiller U.S. National Home Price Index from 2000 to 2017. The index…
What can we gather from this information?
Through simple logic and correlation (but not causation), we can observe that that once a home is purchased, the statistics show that continued ownership is on the positive side. For those bearing fruits we mentioned earlier, optimism should be present. Homes are continuously growing in price, and like any market, that will change subtly, but with the idea that there is a progressive tendency over time.
You might think, “That’s dandy and all, but what about foreclosures?!”, and you are correct to bring that up.
Foreclosures are still around, which is scary, but there is a reason behind that:
Buyers have made investments in the past with the idea that buying would be fruitful, sometimes unadvised, but mainly with loan limits that allowed them to fail. Based on our experience, we would rather turn you away from a bad deal then making one at all. And that is why The Home Company not only stands by its motto, “The best real estate experience possible”, but also is composed of a variety of strong-knowledge agents and team members who value people’s well-being and livelihood.
Here are some quick and simple advice from our team leaders:
Kara — Buy low, sell high
Kristian — Buy anything that cash-flows at least $1 per month. Hold onto it for 30 years and it’s paid off
Hans — You make money on the buy, but not the sale