Monday, March 17, 2008

Managing Your "House Money"

Did you know that the average American, relocates to a new home about every 5-7 years? This is one reason why a home is such a great investment, because you carry that investment's gain from home to home over your lifetime. But what if could continue to gain the value on that investment over your entire lifetime? If you moved every 7 years and lived in homes from ages 24-64, you would have purchased 7 homes over your life time and by the end of that period at least four of them would be paid off! If you set the discipline for yourself to lease every home you lived in after you move out, what could that mean to your family financially?

I just ran some quick calculations with my spreadsheet software and found the following to be true. Assuming a 5% annual appreciation growth rate (conservative to say the least), over a 50 year period:

1. You would have acquired 7 homes in your portfolio.
2. The homes would be worth over $8MM.
3. By just paying pretty close to normal 30 year fixed mortgage payments, your equity would be running about $6.25MM.
4. You would be generating over $800K/year in cash flow (income).

So would you say that adding this financial discipline to your budget would be a good thing for you? Just imagine, passing down an inferitance of this sort of value to your children in their 40's as well as teaching them to do the same with their real estate investments.

Call us The HBH Group for more detail or plan to attend one of our Buyers or Investors Seminars soon. You can reach us at (512) 439-3772 / (877) 268-1877 / or see our websites at: or

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