Building Equity

Buying

There can be a misconception that investing in real estate will instantly result in a favorable equity situation. That fact can be actual in some markets and purchases, but equity generally builds over time.


Building wealth through real estate is a critical component of financial growth. However, like any other investment, you must be smart about it, understand the pros and cons and work with knowledgeable professionals to help advise you.

Invest in property to increase finances over time

With the current state of the 2021 real estate market throughout the US, gains occur in many areas month-over-month. This statement means that homeowners are building equity faster than ever before. With monthly mortgage payments that are ticking away at your principal balance, along with rising values, your nest egg can add up over time.


In an active market where homes sell with multiple offers and often above the asking price, buyers pay a premium. Buyers paying a dividend can cause concern. Remember that in our current market, for example, properties are appreciating at a consistent rate of 10- 15% per year. Many neighborhoods are seeing even higher returns. Buying now does two things. It prevents you from paying a higher price later, allowing you to capitalize on the increase in values.


The equity that you can build over a year of homeownership is far better than what you will yield in a traditional savings account. Use your money wisely.

Maintain your home and protect your investment

I can’t stress this enough. Investing in your home can also build value but maintaining it protects the asset. Homes with a lot of deferred maintenance sell for less. On the other hand, houses with more care are where sellers often lose a portion of the equity that they have built.

Borrowing against the equity in your home

Equity can also provide borrowing security. While I believe in the importance of paying off your mortgage as quickly as possible, interest rates are still at historic lows, which means that borrowing against your home is very affordable. I have a lot of clients that have good equity in their home and lines of credit set up against that equity which gives them access to cash if they need it.

I’ll leave you with this. The bottom line is buying, getting on the property ladder, owning something, and letting it grow your wealth is a good thing!

Interested in learning more about market conditions from 2021, click here or perhaps explore how waiting to buy can be expensive? It’s all on the blog. You can also follow me on Instagram @rebeccagreen.co or reach us directly for a consultation if you’re ready to buy or sell your home in Portland, Oregon, or SW Washington at 541.728.1143.

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December 8, 2021

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MARCIA KIES

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REBECCA GREEN

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