"Buy a House... Then Buy Another". Today's home prices are on a par with about 2004 in St. Cloud MN, but the home affordability is probably more like 1996 according to Chris Mayer of Daily Reckoning. Adjusted for inflation he suggests today's affordability is 30% lower than 1996.
Put simply, affordability is the price you pay per month, not the gross sale price. It's how your paycheck is impacted by owning the home, and the mortgage that usually comes with it! The quote was originally attributed to Adam Smith on the Dick Cavett Show in 1971, but it's good advise today, being repeated by some of the best in the investment business, like John Paulson (a hedge fund manager; he made 2.5 billion personally betting against the sub-prime lending market) who called the housing bust in '07.
Paulson advises to buy a home, and if you already own one, to buy one or two more. He's right of course. All of the people that go through foreclosure have to rent from someone!
Years ago some friends got divorced, and the husband moved out and bought a duplex, using the services of yours truly. "George" used his VA eligibility to finance, and it was such a good deal, he asked if he could do it again! He ended up buying a new property every 2-3 years, owner occupying each in turn, and alternating between FHA and VA. Always complying with Owner Occupancy Affidavits which required a period of owner occupancy. "George" retired at 55.
Today's market reports from NAR and Credit Suisse and Wells Fargo will all tell you that the largest Buyer Sector today is the Investor.
People with money are buying homes and making money. I can help you do it too!
Where else would they invest? Stocks? Bonds? Money Market Funds? The prices are at or near the bottom and interest rates are near the lowest they have ever been, and have begun to climb, but you can still get a 30 year mortgage at a little under 5%. The cost of owning a home is lower than maybe 20 years ago.
Now is the time to buy and grow your personal wealth!