Return On Investment For Real Estate

Posted By Barbara Baker @ Jul 17th 2010 12:00pm In: Sedona Real Estate

I received this following from a wonderful friend of mine who is a local lender in the Sedona real estate market - Lindar Rogers (928) 301-0822 and I would like to share it with all of you.

I was talking to two agents today about how we have come to view our homes as an investment and not just as a home anymore and how that has led to so much discontent and upset over the real and perceived losses in home values. People are seriously wondering if they should invest in real estate at all. I thought it might be useful to bring a little historical perspective to the conversation.

Houses in this country have lost substantial value over the last five years. And if you bought property in 2006 and need to sell it today you could have lost as much as 25-30% of its value.

What we forget is that people who invested money in the Dow in 2007 and sold it in January 2009 would have lost 49.3%. Even if they sold it today they would still be at a 27.7% loss. Does this mean that we should never again invest in stocks?

If someone bought gold at the end of 1987 and sold it in 2000, they would have lost approximately 50% of their investment. I am sure there are people who swore they would never buy gold again when it dropped to $250 an ounce, but look at it now…over $1200 an ounce.

Why do people look at just the monetary price of a home? Its value is so much more than that. A home provides shelter and a place to spend time with family and friends. Yet we expect our homes to provide a return on investment. What other big ticket item that we buy do we expect that from? Surely we don’t expect our boats and cars to appreciate.

But let’s say you want to know where the largest returns are on your investment dollar, not in the short term but over the long term. Here is the percentage return you would have on May 31, 2010 if you invested money in each of these investments on January 1,2000.

Real estate was the best investment even throughout one of the most difficult decades in America homeownership.

Spread the word!!!!!
For all you buying and selling needs in the Sedona homes for sale marketplace I can be reached via the web - just click here, or become a FAN of my Sedona Real Estate Page on Facebook, or the old fashioned way - 928-301-0669. Happy Buying - Happy Selling