A question I hear a frequently is "how can I become rich?" I want to challenge you to Google it because the Google answer is going to have something to do with real estate. Many of the wealthiest people in the world got to where they're at today because of real estate.
How do you start this process as a first-time homebuyer?
Let's say you're looking at buying your first home at a $250,000 price point. If you look back over the past 20 years, we have had a 4-5% increase in home values every year.
250,000 x 1.05 = 262,250 | In one year of a 5% gain, you made $12,250.
Do this five times and in five years, your house will be worth more than $300,000 just based on pure stats. Just by owning a home and living in it, you're going to start to prosper.
When you're ready to make a move, do you keep the house or do you keep it? Either option is viable. If you sell it, my recommendation would be to use the equity you gained to make two down-payments and begin the rental property conversation because that is where the wealth is going to start to build.
- Doug Edrington, CEO of Berkshire Hathaway HomeServices J Douglas Properties