Wednesday, November 2, 2011

To Buy or Not to Buy


    Owning real estate and what you do with it and how you manage it while you own it has a critical impact on its value.  Owning property gives you  more control of your potential profit than any other asset.  You have no control over the performance of other investments such as stocks and bonds.  Leverage is what owing property provides to you unlike any other investment.
    An example to ponder is this. Let's say you purchase a property for $150,000.00 and make a 20% down payment ($30,000.00).  After one year, the property appreciates by 4%.  The rate of value increase applies to the entire $150,000.00. The 4% appreciation equals  $6000.00.  Another way to see it is this.  The truth is the only money you have invested are the down payment funds, ( $ 30,000.00).  A $6000.00 return on a $ 30,000.00 investment calculates out to a  20% rate of return. At any time, that is considered very good.
    Investment experts still agree that with the combo of very low interest rates and a large inventory to choose from, prices at rock bottom, we are in still in the best real estate investment environment in decades.

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