Don’t you LOVE getting a great deal?
Sure! It’s fun to buy something you really want at a lower than retail price.
In fact, such “bargain acquisitions” provide many years of bragging rights and story telling (Often with an increasing amount of embellishment.
It’s even MORE fun when it’s a “big ticket purchase” . . . like a car or a house.
When we start thinking in terms of the buying power of our money, we become more intentional about our purchases and tend to score more bargains than most.
How does this mindset work?
Well, 80% of the benefit comes in the form of resisting impulse purchases. The marketers are VERY savvy at convincing us that THIS is a GREAT deal, and you will certainly regret letting it pass . . . yet – Odds are decent that this thing isn’t something you need now . . . or EVER.
When we talk about the power of your money in real estate transactions (Houses and Investment Properties), it all boils down to timing and leverage.
Value – Are the selling prices of houses increasing or decreasing? If they are increasing,
Mortgage Interest Rates – Are they increasing or decreasing? If increasing, the buying power of your money DECREASES every day that you wait.
If BOTH values and interest rates are increasing the decrease in your buying power becomes exponential – You’re losing ground FAST.
The 3rd consideration is Leverage of your cash. Given the current appreciation and mortgage rate climate relative to the earnings you are yielding with your interest bearing of investment accounts, does it make better sense to invest as little as possible cash into the deal with the prospect of winning because of the probable appreciation of the property, thereby growing the initial (low) cash investment many times over in a relatively short period of time.
These are things I think worthy of considering and talking through with a Real Estate Sales Professional or Mortgage Lender or Banker or CPA prior to launching into the process of buying a house or investment property.
Of course . . . I have relegated the ego/emotional/keepingupwiththeJoneses to the ether but acknowledge that these are the antagonists to strategic and intentional focus on optimizing the power of your money . . . and can only leave this part up to you.
I love working through these matters with Home Buyers and Sellers and helping them get the most satisfaction out of their purchases or sales.
What I love even better is being a part of one of those “Bragging Rights” stories 🙂