When you start looking at real estate in your city or town, one of the first things that you need to consider is the overall appreciation rate. Real estate is one of the most profitable investments, one that will outclass stocks, bonds, and even commodities. They are also a safe investment for many reasons. If you are purchasing this as a rental property, it is so easy to find someone to rent it from you. If you are buying this as a home that you will live in for a couple of decades, regardless of where you are located, the value of the home will appreciate over time. It is important to consider the different neighborhoods in your city when you are purchasing an investment property because various locations will appreciate a wide variety of levels. You will want to find a place that has a track record of appreciating not only quite quickly, but will inevitably have the most equity built up in the home.
Average Appreciation Rates For Homes
A simple search on the Internet will show you the average appreciation rates for homes in your state. For example, if you look up estate by California which is one of the better places to invest in real estate, the average is about 7% annually. Looking at this over a five-year period, if you purchased a home half a decade ago, you would have earned over 45% in total appreciation value. This can be different for each state, and these are just average values. Urban areas tend to appreciate very quickly. This research will help you choose specific areas of your community where you have the highest possible chance of generating a substantial amount of profit by doing nothing more than purchasing and renting out one of these properties.
Where The Best Appreciation Rates?
If you start looking for the best appreciation rates for real estate throughout the nation, you will see that the largest cities tend to have the best ones. Places like Denver, Austin, Houston, and New York City tend to top the list as they have for decades. The investment that you make should also consider other factors such as how much it will cost to purchase these properties. Instead of buying one very expensive property, you might want to put down payments on 10 or more properties, and then hire a property management firm to keep them rented over the years.
Do Appreciation Rates Matter?
There is a consensus that learning about appreciation rates is a good strategy to use when investing in real estate, but others state that it doesn’t matter. Most of them will be very close to the average rate, and therefore any real estate that you purchase is going to be at a higher value as the years pass by. There is always the possibility that you could buy at the wrong time. If the market has been steadily rising, a course correction might be possible. You can determine whether or not it’s a good time to in best by either talking to experts or watching for news reports that would indicate that it is either a good or bad time to go.
The value of real estate historically has always gone up. When you compare this to any other form of investing, it’s always going to be one of the best ways to utilize your money. It’s simply going to remain that way, and although appreciation rates can fluctuate from time to time, it is the best long-term investment that you can make.