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Is Buying a Home Still a Smart Plan?

With the burst of the housing bubble, credit crisis, and millions of foreclosures across the country, you may wonder if buying a home is such a good idea after all. However, it’s important to consider all of the facts. The important message to take away from these events is not that buying a home is a bad idea, but that you must be smart about buying your home.

The housing market, like every type of market, unavoidably has its ups and downs. That doesn’t mean buying a home is a bad investment. As a long-term investment, homeownership is still one of the best investments for individual households. Historically, real estate has consistently increased in value, despite shorter periods of depreciation due to local markets and/or national economic conditions. The data shows that homes generally appreciate about 5% per year.

Savings & Investment

Five percent may not seem like a great return on investment, but you have to think about it in the context of the situation. For example, let’s say you put 10% down on a $200,000 house. That’s a $20,000 down payment, or initial investment. At a 5% annual appreciation rate, your $200,000 home would gain $10,000 in value during the first year. Earning $10,000 on an investment of $20,000 is a whopping 50% return.

For further perspective, let’s say instead of spending that $20,000 on a down payment, you invested it in the stock market. With a 5% return, you would gain only $1,000 in profit.

Tax Benefits

So now you’re saying that a home may have a higher return, but that’s before you consider all of the costs of home ownership, such as taxes, etc. Well, think of it this way: your property taxes as well as the interest on your mortgage are both tax deductible. You can deduct those costs from your income, thus reducing your overall taxable income. In other words, the government is subsidizing your home.

Other Benefits

It’s easy to get carried away with all of the economic reasons for home ownership, but it’s important to remember that not every reason is financial. Have you ever wanted to paint the walls of your apartment? Well when you’re renting, you can’t. Has anything in your apartment ever needed updating, but the landlord refused to do it? When you own a home, you can make the space yours in almost any way you want. And you benefit when you do home improvements, both financially and psychologically. Homes generally have more space, for storage, living, etc. than other living arrangements. Not to mention that you have space outdoors for barbecuing, pets, and kids. Owning your home carries with it a sense of pride, accomplishment, and even an elevated social status.

So when you’re considering buying a home, consider the broad range of benefits that owning a home can have. And always make sure you have an experienced real estate agent and loan officer to help make sure you’re getting a home that is right for you, both financially and psychologically.

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Testimonials

HI My name is Steve Woodhatch from Sydney Australia.I have bought and sold many properties right across Australia. I am writing of my experience with Dan Reedy from MORE Property. I bought 3 properties from Dan Reedy,and had never bought in USA or knew much about Kansas City Mo,till I heard Dan Reedys radio show. After listening and thought this guy knows what he is talking about I dropped him an email,and made the long trip From Australia to Kansas City mo. I also went to about 4 other states and spoke and looked at many properties,but I found Dan to be the most ethical and Knowledgable as regards the many different markets in Kansas city from Properties in the hood right up to the most expensive suburbs.I will be buying more from Dan. And his wife Nancy is very proficient in accounts and the rental side of the buisness which is one of the most important parts of owning Real estate. Kind Regards Steve Woodhatch Sydney,Australia Steve Woodhatch
It is with much pleasure that I write this letter of recommendation regarding Dan Reedy and his agency, MORE KC. As an overseas investor, finding excellent management was crucial for me, and I feel very fortunate to have Dan and his team looking after my properties. He and his wife Nancy offer a complete real estate service, ranging from rehabbing, to carrying our repairs, finding tenants, and managing the tenancies. Dan is an excellent communicator, which is of paramount importance to the overseas investor. Whenever I have cause to email him, he invariably replies on the same day, and more often within the hour. If urgent repairs need to be carried out, Dan always manages to sort things out immediately, and I always receive his friendly email saying ‘all done’ once things are back in order. Nancy runs the rental side of things like clockwork, with rental statements always delivered on time. The Property Ware software used by MORE KC is brilliant, and because Nancy and her team are vigilant about keeping it up-to-date, owners can log in at any time to check on the current state of bills, repairs, payments, leases etc. I have no hesitation in recommending MORE KC to any property investor, and particularly to out-of-state and overseas investors, who can feel confident that their properties are in good hands. Yours sincerely, Diana Masters Diane Masters
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Dan Reedy 816-767-1188

Over 2000 Homes Bought and Sold Since 2005

#1 United Agent Nationally

 

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