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Home Ownership is an investment

Home ownership in America is almost viewed as a right of passage. Most any American will at one point desire home ownership, it is the American Dream. This dream becomes reality every day in the United States. I know of property and homes that have been passed on to next generations. I wonder when I see this what the thoughts of the original homeowners were when it was acquired.   For me and in my mind when Real Estate is passed to the generations represents the ultimate wise investment. While pondering on this I recalled a friend of mine in the Dallas area that from my perspective seemed to get it right.   For the sake of this story and example I will call him Mike.

Home Ownership and Renters

Mike was a single parent and he was also in a relationship with another single parent. They were great parents but  Mike and Mary wanted to provide stability as they blended their families. Realizing this they determined to continue their relationship but live separately.  Home ownership was not really being considered, Mike rented ½ of a duplex and continued raising his children, and when possible also helped with Mary’s children and of course she helped him. She is a Medical Professional and Mike an electrician. Approximately 8 months after he rented one side of the duplex, the owner approached him and advised due to his circumstances he would be selling the whole building. Mike was working for a solid company with good stability and after seeking counsel from his Father, he now found himself as the owner of the building. The location was ideal with his employer and over the next 13 years, the income he received from the other side paid the mortgage on the property. Mary had purchased a home as well and over the next 10 years of owning it this home appreciated.

Home Ownership reflects stability

Six or seven years passed,  Mike and his father started a business. Mike and his father were very gifted and creative, his father was a genius with metal fabrication and Mike with his electrician skills was also a welder. His Mother worked for a small city outside of Dallas suburbs. With their combined talents they designed Christmas Lights and shows for the city. This was no small thing, I was invited to attend the first night of the lights signifying the beginning of the Christmas season. My wife and I watched a phenomenal show complete with music synchronized with dancing lights  and fireworks shooting from various points and even the water tower. Their business grew and so did Mike and Mary’s need for more living space. She had sold her home, Mike and Mary were married and the duplex was paid off primarily from the rental income received from the other half of the building they were living in. Their combined incomes was strong and Credit history was good.  They called my wife Ronda (Realtor licensed in Texas and Florida) to assist them find a home within their needs.   Within a few days an offer was made and within a short time they were moved into another home.  This all began with steady but sure planning and staying within their housing budget.

Home Ownership is a curve against inflation

Many times I have witnessed young professionals advised they can purchase far more home than necessary. When tough times hit they have maximized their credit and most of their monthly income is obligated to a home far more than their true need. I may have left  out many parts of Mike and Mary’s success story but I have admired what they accomplished. They not only used wisdom in their parenting and set an example to their children, they took home ownership in smaller increments and did not take on more than they could handle.   Home ownership is a curve against inflation and establishes a known housing expense allowing better budget planning. Rent can be raised and whether a person rents or buys they will buy the place they live in. Mike and Mary’s rental income paid for the bulk of  a duplex mortgage. I can only imagine as it is human nature they wanted a bigger home but they resisted and planned properly.  Lenders do not come across an abundance of Mike and Mary that plodded a slow but sure  steady progress of their home investment strategy.

Home Ownership is possible

Home Ownership can be a reality, a new homeowner does not have to start with a huge house and a pool, a slower steady progress is often wiser.  The Larry Stepp Team at Gustan Cho Associates are available 7 days a week, holidays and weekends for your assistance.

Larry Stepp     407-922-4755     LarryS.HomesNetwork@gmail.com

 

The information contained on HomesNetwork.org website is for informational purposes only and is not an advertisement for products offered by Loan Cabin or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates and do not reflect the policy of GCA, its officers, subsidiaries, parent, or affiliates.

1 Comment

  1. […] impact in world business and impacts the Gross Domestic Product which determines interest rates and home mortgages.  Purchasing a home is a solid investment strategy and it begins with commerce in the purest form, […]

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