An article caught my attention today by Andrew Vandamme “owning own home doesn’t make you rich: owning someone else’s does”. I’m talking about real estate investments. Owning your own home and living in it might not bring you the wealth you desire, but business owners and landlords tend to be about four times as wealthy as the average American. Renters in the United States tend to have about an eighth as much wealth as the average American.
Business owners and landlords make up about 15% of US households and tend to be among the wealthiest. This wealth is used to generate additional income and wealth. The top 5% of wealthiest Americans tend to own businesses and/or rental properties and this demographic has increased exponentially since about 1960. “Housing costs have risen 40% more than the prices of other goods since 1970 and the share of renters who spent more than half of their income on housing doubled between 1970 and 2011.” [Source]
Homeownership has generally propelled people up the ladder from renting to owning and maintaining their own equity and building wealth. But in today’s society, it’s getting harder for renters to become homeowners. Prices have gone up, especially across the bay area and a 20% down payment is a lot more than it was 30 years ago. Stricter lending rules have also been a blessing and a curse. We don’t want to see another housing crash but it might be to more difficult for people to obtain a mortgage.
The old adage, you have to spend money to make money is truly the case in real estate investing. However, there are several lenders out there that will help people get started on the real estate investing track. Once you get in the real estate investing game, it’s easier and easier to continue to invest in rental properties.
Give me a call if you have questions about real estate investing and investment properties throughout Alameda and Contra Costa County. I specialize in helping buyers find the perfect real estate investment and can offer tips and strategies for investing wisely.