4 Proven Ways to Build Wealth in Real Estate

Recently, David Greene, co-host of the BiggerPockets podcast and a nationally renowned author and speaker, wrote an article in Forbes explaining how investing in real estate could help build wealth. Many of the points he made also apply to a family owning their own home. Here are a few:

1. Appreciation

“The rising of home prices over time, is how the majority of wealth is built in real estate. This is the ‘home run’ you hear of when people make a large windfall of money. While prices fluctuate, over the long run real estate values have always gone up, always, and there is no reason to think that is going to change.

One thing to consider when it comes to real estate appreciation affecting your ROI is the fact that appreciation combined with leverage offers huge returns. If you buy a property for $200,000 and it appreciates to $220,000, your property had made you a 10% return. However, you likely didn’t pay cash for the property and instead used the bank’s money. If you consider that you may have put 10% down ($20,000), you actually have doubled your investment, a 100% return.”

2. Leverage

“By nature, real estate is one of the easiest assets to leverage I have ever come across—maybe the easiest. Not only is it easy to leverage the financing of it, but the terms are incredible compared to any other kind of loan. Interest rates are currently below 5%, down payments can be 20% or less, and loans are routinely amortized over 30-year periods.”

3. Paying Off the Debt

“One of the best parts of investing in real estate is the fact that … you’re slowly paying down your loan balance with each payment to the bank… After enough time passes, a good chunk of every payment comes off the loan balance, and wealth is created.”

4. Forced Equity

“Forced equity is a term used to refer to the wealth that is created when an investor does work to a property to make it worth more…

Example of this would be adding a third or fourth bedroom to a property with only two, adding a second bathroom to a property with only one, or adding more square footage to a property with less than the surrounding houses.”

Though Green was talking about investors, the same could be said about a family upgrading their own home.

Bottom Line

Green put it best by saying:

There are many ways to build wealth in America, but real estate might be the safest, steadiest and simplest way to do so.”

Source: Keeping Current Matters

The KonMari Method: Prepping to Sell Your Home

One of the biggest challenges sellers face when listing their house is decluttering. Cleaning out some of the more personal decorating choices allows buyers to imagine themselves living in the house.

Those planning to sell soon are in luck! Marie Kondo, the inventor of the KonMari Method of Tidying Up, has gained popularity with her new Netflix series. She gives some great tips for sorting through years of accumulated possessions that we all collect in our homes.

“The KonMari Method™ encourages tidying by category – not by location – beginning with clothes, then moving on to books, papers, komono (miscellaneous items), and, finally, sentimental items. Keep only those things that speak to the heart, and discard items that no longer spark joy. Thank them for their service – then let them go.”

When you subjectively look at all of your belongings, you can sort through the ones that mean the most to you. Not only will you increase space for more joy-bringing items in your new home, but you will also have a much easier time packing remaining belongings!

“Remember, tidying up isn’t about getting rid of stuff. It is about creating an environment that sparks joy and improves your quality of life.”

When selling your house, first impressions matter! Before you or your agent schedule a photographer to take photos for your listing, make sure to tour your home with fresh eyes. Look for any imperfections that a buyer might notice.

When you sort through your more sentimental items, consider packing them away to ensure that you know where they all are. That way, they are safe during open houses and showing appointments. This will also cut down on the amount of packing you need to do right before you move!

Bottom Line

Whether you are selling your house to move up to a larger one, downsizing, or moving in with family, only bring the items that truly spark joy for you. This will not only help cut down on the items you move, but also ensures that you’re off to a great start in your new home!

Is it time to list your home for sale? Schedule a seller consultation with me at atfowlerrealtor.appointy.com.

Saturday Night Lights (Patio Decor)

If you know me, you know that my love for Target is unbelievable. I can literally get my entire life at Target. It is where I go when I want to get a new spunk. It is where I go to grab a quick pair of jeans, cute flats when my feet hurt, and overall a place to change the look up of my home.

One of the least thought of places to really add some flair into a home is the patio. This neglected area can really be the place to add some charm. As a Louisiana girl from city/rural (is that even a thing? Yep. I’m claiming it), I love to live outdoors. It is what my childhood was made of. It was how you entertained friends. Get out of my house and enjoy outdoors with me.

My friends over at Target are having 25% off patio items starting January 27th. If you don’t know, let me let you in on my Target shopping. I know that on Sundays, new sales roll around. If you don’t like what you find available, wait until Sunday. New sales ad, new items on Cartwheel. Now in your favor, new patio items with 25% off.


I took some stuff and created a new patio look that I could see in the near future.
Links to items in the mood board ard below:



Conversation Set: http://bit.ly/mauiwicker

Rug: bit.ly/coffeerugtarget

Firepit: http://bit.ly/firepittarget

Candle Lantern: https://www.target.com/p/siena-16-led-candle-outdoor-lantern-antique-brown-smart-living/-/A-50942282

String Lights: https://www.target.com/p/10ct-outdoor-gold-hood-g40-string-lights-with-black-wire-opalhouse-153/-/A-53808091

Faux Plants: https://www.target.com/p/garden-accents-artificial-calathea-plant-green-30-national-tree-company-174/-/A-52207173

Succulent Plant: https://www.target.com/p/faux-succulent-in-speckled-white-pot-threshold-153/-/A-53481860

Do You Prefer the Charm of An Older Home?

When homebuyers begin their research, they want to see all their available options! In many cases, they will include both new construction and existing homes in their search; but is a new construction home really the house of their dreams?

According to a recent survey by Zillow, of the 38% of total buyers that added new construction to their list, only 11% ultimately purchased a newly constructed home!

They added that 71% of these buyers are repeat buyers who are financially secure, with 45% using the money from the sale of their previous homes to make a purchase.

Below are some reasons why buyers are interested in purchasing a new build:

  • Everything in the house is new/never used (49%)
  • To be close to family (41%)
  • The home is the best value for their money (37%)
  • Appealing home features (34%)
  • Desirable location (34%)

So, then why did most of the buyers surveyed choose not to purchase a new home?

1) Location

Buyers could not find new construction in the desired neighborhood, and some felt that new construction is not established (e.g., landscaping, community, neighbors).

2) Timing

Buyers face the end of a lease or sale of their previous property and could not wait for a house to be built.

3) Price

Some buyers felt that new construction base prices were deceiving. Adding upgrades and HOA fees no longer made the home fit in their price range.

4) Appeal

For some buyers, new construction homes are too “cookie cutter,” and models are limited. Others feel that the charm and uniqueness of an existing house trumps one that’s never been lived in.

Bottom Line

Not all buyers are looking for a newly built house! There are many buyers looking for “the charm and uniqueness” of an existing home. If you are considering selling your house, don’t wait! Let’s chat today to discuss buying the perfect charm.

Source: Keeping Current Matters

Early Homeownership Increases Wealth

Homeowners who purchase their homes before the age of 35 are better prepared for retirement at age 60, according to a new Urban Institute study. The organization surveyed adults who turned 60 or 61 between 2003 and 2015 for their data set.

“Today’s older adults became homeowners at a younger age than today’s young adults. Half the older adults in our sample bought their first house when they were between 25 and 34 years old, and 27 percent bought their first home before age 25.”

The full breakdown is in the chart below:

Buying a Home Young is the Key to Building Wealth | Keeping Current Matters

The study goes on to show the impact of purchasing a home at an early age. Those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-twenties and early-30s had close to $50,000 left, but traditionally had purchased more expensive homes.

Buying a Home Young is the Key to Building Wealth | Keeping Current Matters

Many housing experts are concerned that the homeownership rate amongst millennials, those 18-34, is much lower than previous generations in the same age range. The study results gave a great reason why this generation should consider buying instead of signing a renewal on their lease:

“As people age into retirement, they rely more heavily on their wealth rather than their income to support their lifestyles. Today’s young adults are failing to build housing wealth, the largest single source of wealth, at the same rate as previous generations.

While people make the choice to own or rent that suits them at a given point, maybe more young adults should take into account the long-term consequences of renting when homeownership is an option.”

Bottom Line

If you are one of the many young people debating whether buying a home this year is right for you, sit with a local real estate professional who can help.

2019 Goal: Buy a House.

As we kick off the new year, many families have made resolutions to enter the housing market in 2019. Whether you are thinking of finally ditching your landlord and buying your first home or selling your starter house to move into your forever home, there are two pieces of the real estate puzzle you need to watch carefully: interest rates & inventory.

Interest Rates

Mortgage interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. Despite the recent drop, interest rates are projected to reach 5% in 2019.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.

Excited About Buying A Home This Year? Here's What to Watch | Keeping Current Matters

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000).

Inventory

A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 3.9-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 81 straight months.

The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last six months.

The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, since June, inventory levels have started to increase as compared to the same time last year.

Excited About Buying A Home This Year? Here's What to Watch | Keeping Current Matters

This is a trend to watch as we move further into the new year. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and closer to a normal market.

Bottom Line

If you are planning to enter the housing market, either as a buyer or a seller, make sure that you get connected with an agent who can help you navigate the changes in mortgage interest rates and inventory. Every market is different. If you’re in Dallas-Fort Worth, we can connect at 972-813-9788 or atfowler@newavenuerealty.com.

Source: Keeping Current Matters

How to Simply Increase Your Family’s Wealth by Paying for Housing!

Everyone should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of ‘forced savings’ that allows you to use your monthly housing costs to increase your family’s wealth.

Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equity. As your home’s value increases you also gain home equity.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

The latest data from their Q4 2018 Surveyrevealed that home prices are expected to round out the year 5.8% higher than they were in January. For the next 5 years, home values will appreciate by an average of nearly 3% a year.

This is still great news for homeowners!

For example, let’s assume a young couple purchases and closes on a $250,000 home in January. Simply through their home appreciating in value, those homeowners can build their home equity by nearly $40,000 over the next five years.

How to Simply Increase Your Family Wealth by Paying for Housing | Keeping Current Matters

Let’s look at the potential equity gained over the same period of time at some higher price points:

How to Simply Increase Your Family Wealth by Paying for Housing | Keeping Current Matters

In many cases, home equity is a large portion of a family’s overall net worth.

Bottom Line

If your plan for 2019 includes entering the housing market to purchase a home, whether it’s your first or your fifth,chat with me to help you understand where prices are headed in DFW.

📞 972-813-9788

📧 atfowler@newavenuerealty.com

📆 atfowlerrealtor.appointy.com

Blog Post: Keeping Current Matters

Winter versus Spring Listings…should you wait?

Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!

The #1 Reason to List Your Home in the Winter Months is Less Competition!

Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.

The #1 Reason to Not Wait Until Spring to Sell Your House | Keeping Current MattersThe #1 Reason to Not Wait Until Spring to Sell Your House | Keeping Current Matters

As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February).

Temperatures aren’t the only thing that heats up in the spring – so do listings!

The #1 Reason to Not Wait Until Spring to Sell Your House | Keeping Current Matters

In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house.

Added Bonus: Only Serious Buyers Are Out in the Winter

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping.

Bottom Line

If you have been debating whether or not to sell your home and are curious about market conditions in your area, talk with a local real estate professional who can help you decide the best time to list your house for sale.

Down Payment Great? Are You Prepared for Closing Costs?

Buyers: Don’t Be Surprised by Closing Costs!
How Much Are Those Costs? 

Often I hear all the talk about down payment cost but rarely do new buyers understand that there are more costs to buying a home than your down payment money. Closing costs are the most forgetful thing or rather unknown unless you are outside of the real estate business. 

Many homebuyers think that saving for their down payment is enough to buy the house of their dreams, but what about the closing costs that are required to obtain a mortgage?

By law, a homebuyer will receive a loan estimate from their lender 3 days after submitting their loan application and they should receive a closing disclosure 3 days before the scheduled closing on their home. The closing disclosure includes final details about the loan and the closing costs.

But what are closing costs anyway?

According to Trulia:

Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.)”

Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. As mentioned before,

Closing costs are typically between 2% and 5% of your purchase price.

Trulia continues to give great advice, saying that:

“…understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.”

Bottom Line

Schedule a buyer consultation with me determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

Source: Keeping Current Matters

Black Friday: Target Style

Find the Target deals here for the Holiday 2018 Season
Just bought the new home and looking to score some amazing deals? Well my absolutely favorite store is prepping you up for Black Friday. Hang that new flat screen tv in the media room, set up Alexa in living room, and add some style to the bedrooms and bathrooms. Target is your one-stop shop which is why I consider myself a Target addict! I can spend hours in Target. It instantly brightens my mood whenever I walk through the door. 

Explore the new Black Friday ad from Target before next week! 

Here are my tips for shopping at Target:

- Get a Target Red Card
This card can be linked to your debit card or you can use the credit card feature for this. I prefer the debit. I save 5% everytime I use it. In Texas, that is basically you paying less on the sales tax around 3.25%. #WINNING

- Scan your Target app
Whenever I am in Target, I make sure to scan the items I purchase to see if it is on Cartwheel or any additional coupons can be applied. That is even more savings. I've saved over $500 dollars using Cartwheel.