Now is a good time to buy real estate. Multibillionaire hedge fund operator John Paulson says now is the time to invest, stating: “If you don’t own a home, buy one; if you own one home, buy another; and if you own two homes, buy a third and lend your relatives the money to buy a home. Your debt and interest payments get locked in at record lows, while the price of your home is still safe. Paulson is not alone in his belief that now is a good time to buy. A recent study by several universities, found that todays hurdle rate, or the point at which its equally smart to rent or buy if your only criterion is to build wealth, also suggests that it is a better time to buy. In Study Calls Todays Market Good Time to Buy, an article found in REALTOR® magazine, Robert Freedman, NARs manager of multimedia communications, notes the following: The hurdle rate is the point of equilibrium between renting and buying where it’s a wash in terms of wealth building. If today’s hurdle rate is lower than the average past property appreciation rate for a particular market, then it makes sense to buy, because future property appreciation should be such that an individual will, on average, create more wealth through owning rather than renting. On the other hand, if today’s hurdle rate is higher than the average past property appreciation for a particular market, then this is a sign that ownership can be a drag on wealth creation.
Posted on: Wed, 26 Nov 2014 00:26:18 +0000
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