Why Real Estate is the BEST investment
Purchasing real estate is the best investment you can make because owning your own property has tremendous benefits – especially a Laguna Beach home! Your rate of return when purchasing a house is higher than almost any other investment you can make. Homes traditionally appreciate about five percent a year nationwide and what we’ve experienced here along the Laguna Coast over the past few years was unprecedented – where appreciation rates have been as high as 25%!
Demand for housing in Orange County is staying strong – which has created a state of permanently higher prices. The median home price in December 2016 was $630,000 – the highest since the Recession and the highest median price for any month in over eight years – up 8.2% from December 2014. Regional home sales also increased around 9.8 percent to 20,890 transactions – the most for any December since 2009 – with Orange County recording the biggest percentage gains (according to CoreLogic).
Laguna Beach Home Values have grown at an even higher pace. Rated as one of the “Best Places to Live” (Sperling’s), the median listing price for a Laguna Beach Home was $1,965,000 (from end of Sept. 2016 to end of December 2016) with an 11% increase in median home sales in the past year.
Even if you consider real estate appreciation at a very conservative 5% – if you bought a $1,000,000 home (and put 20% down, an investment of $200,000) the property could increase in value $50,000 in the first year. That means you would earn $50,000 with an investment of $200,000, therefore your annual return of investment would be an impressive 25%. And, since both the interest on your mortgage and your property taxes are both tax deductable, the government is essentially subsidizing your house purchase!
Beyond the lucrative investment of owning this “tangible” investment that you can live in, your home is like an automatic savings account, accumulating savings in two ways: Each month a portion of your payment goes towards the principal (paying down the balance) and this appreciates over time. Plus, you get the benefit of any improvements you make (and most of these improvements are also tax deductable!).
You can also rent out the home as a vacation rental (an incredibly lucrative investment here in the resort town of Laguna Beach – we can show you how – Connect with our team to learn more!) or as a long term rental for investment purposes. This way your hard earned money is working for you instead of going into another landlord’s pocket.
Whether you are just beginning to consider the benefits of home ownership, are relocating and contemplating a purchase over renting for investment purposes, or if you are looking to upgrade to a larger property along the Laguna Coast, here are a few tips that will facilitate your house hunt and help you find the perfect home.