Financial Samurai’s answer:
I wish someone told me how amazing it feels to get the keys to your first property. It’s an indescribable feeling that’s comparable to getting into your top choice school or getting a message from a person you like saying “yes” they’d like to meet up. Real estate is my favorite asset class to build long term wealth.
If I knew how awesome it is to own, I would have tried to buy even earlier than 2003. My biggest regret was not buying a double balcony, 1,200 sqft, 2/2 condo in Manhattan with a view of the Chrysler Building and a park back in 2001 for $780,000. It would be worth over $2M today.
The debate about renting or owning your primary residence is nonsense IMO if you plan to stay put for at least five years. If you are renting, you are SHORT real estate and inflation. Inflation is too powerful a force to combat. Compare rents 10 years ago versus today. Compare prices today versus 20 years ago. Can you imagine shorting the stock market over the past nine years?
Owning multiple properties as a landlord is a different question. That’s when you are truly going long property. For example, I owned two SF rentals before selling one in 2017 to simply life once I became a father. Further, valuations in SF are now ridiculous.
I reinvested $500,000 of the proceeds into real estate crowdfunding to buy lower valuation, higher yielding properties in non-coastal cities with zero hassle. Owning your primary residence is staying neutral real estate, which is what I feel everybody should at least do.
Once you own your primary residence, you can start focusing on everything else in life because chances are, your most expensive purchase is out of the way!
Other Things You Should Know Before Buying
- Your property tax rate and what it’s used for
- That everything is fixable, it just costs time and money
- Having a good handyman and contractor is priceless, just like a good auto mechanic
- Don’t extrapolate price appreciation because there are cycles
- Take more risks when you’re young