Today, I’m going to try to persuade you that my argument holds merit and that you should not only consider what I’m saying but, also take action so that you and your family can enjoy the fruits of your labor. Today’s topic is the future of the Lowcountry and how it promises to be a great investment if you make a few strategic moves today…or soon anyway.
I’m referring to the real estate market in case this is the first time that you are reading my blog. My name is Stacie Smith and I am a real estate agent in Charleston, South Carolina. I’ve been writing recently on Using Your Home as an Investment and Steady As We Grow…in which I share the reasons why it’s a great time to sell your home in the Lowcountry.
Old School Thinking.
People often think that they are perfectly content to stay in the same home for the rest of their lives just as their parents did. They plan to pay it off and live there until they die. Hopefully, by the time they retire, they will not have a mortgage or it will be small enough to manage and they can just live on their retirement savings. I’m here to tell you that this kind of thinking is sooo far away from what you should be doing right now. If you own a home in this city or any of the outlying areas within a 50 mile radius, this is for you. You are fooling yourself if you think that it is better for you to keep the house you live in now for 10 more years than to sell it and buy something newer. It doesn’t matter whether it’s smaller or larger but, it does matter if it’s newer or at least completely updated. Why? Simply put, because it is the time to sell. For those of you who enjoy investing in the stock market, you know the term “buy low and sell high” right? Well, this is your time to sell high.
You Have to Pay to Play.
I’m going to acknowledge that there is a big hindrance in the minds of most sellers. They can’t get past the transaction fee, or commission that is paid to the brokerage. In my blog, Using Your Home as an Investment I cover that and do the math in a most simplistic way for those of you who are apprehensive about the costs involved. I’m going to give another example here for the purpose of explaining the cost effectiveness of this investment model.
Explanation of the Math.
Let’s presume that you own a home in the Lowcountry and you have at least $50K in equity in it right now. The new home that you’re considering is slightly more expensive than the one your living in and it’s beautiful. I mean it has everything. I’m saying this because there is value in living somewhere that you love. There is also peace and enjoyment in not having to spend a bunch of money on maintenance and upkeep. We’ll just say, for argument’s sake that your new home costs $350K and your old home is going to sell for $250K. Let’s do the math. If you only have 50K in equity, after your mortgage note is satisfied, when the 6% commission gets paid, you will have $35K. From that, subtract closing costs which we will calculate that to be $5K even though that would be pretty high. I just want you to feel very comfortable that I’m not using best case scenarios to make my point. Now you have $30K in your pocket to use as a down payment on your new home. In my scenario, you had $20K in costs associated with this transaction. ($15K in commission + $5K in closing costs) It is my belief that you will see a complete return on that money if you make your new home purchase sooner rather than later.
While We’re on the Topic of Making Money
On a side note, which is also applicable, we are seeing double digit increases in home values in the Lowcountry right now. That being said, you stand to gain that same percentage on the value of the new home. But again, I want you to feel comfortable that I’m not manipulating the figures for my benefit so, let’s assume that you don’t have a double digit increase on the new property. In fact, lets say you only have a 5% increase in value over the next year. ($350K x 5% = $17,500) That puts you right at $17,500. Add to that the savings you would realize by not having repair and maintenance costs and you can see how this transaction would easily pay for itself in a years time. This example did not take into account the enjoyment, peace of mind and potentially higher gains that you could also expect from making this move. Nor did we project out the potential appreciation over the next 5 years or more which will be compounding annually. Barring any unforeseen cataclysmic events, you practically can’t loose.
I’d like to put in a disclaimer here. I don’t claim to know the future nor am I expecting this kind of real estate market to last forever in Charleston, South Carolina. I’m simply trying to convey that your home is your biggest investment. As with any investments it takes money to make money and you should leverage that in the best way possible for you and your family. These examples are just that. Please note that they are for demonstration purposes only and actual results will vary.
Meanwhile, if I can help you with to sell your home or even to help you with a property valuation that is straightforward and accurate, don’t hesitate to call, text or email me.
Let’s Move To Charleston, South Carolina