Leveraging Your Money
One of the greatest financial aspects of buying a home is the ability to leverage your money. Simply put, leverage allows you to use a small down payment and financing to purchase a larger investment. For example, if you bought a $125,000 home with 10 percent down, you leveraged the $12,500 down payment to purchase an asset worth 10 times that amount!
The benefits of leverage really become apparent with appreciation, or the rise in value of a property. Using the above example, say you were to live in the house for 5 years, and during that time property values in your area were to rise an average of 2.5 percent a year. Your home would then be worth over $141,000. By putting only 10 percent down, you get to enjoy the appreciation for the full amount!
In addition to the 10 percent down, you’ll also have to make mortgage payments. But with each payment, a certain amount of money is being used to pay down the principal balance that you owe. This is called building equity. So in the event you sell your house, not only can you realize a profit from your leveraged money, you also have a chance to pay yourself back for the money you’ve put in over the years. No wonder so many people consider a home an excellent investment!
Featured Commercial Property
Very nice Office Building for rent. This property has a large reception desk as you enter the building with a large workspace behind it and a smaller reception desk to the side. There are 2 waiting rooms, 10 – 11 offices, 2 break rooms, and handicapped accessible restrooms. The building was formerly used by several eye doctors. There is a large parking lot plus parking on the side of the building. Great location in the Century Centre medical complex on E. 21st Street. Call Jerry Cass @ 575 799-5304 or Brett Johnson @ 575 760-3654 for more information.