Currently, over 75% of homes in America with mortgages enjoy those ultra low rates of a few years ago and are typically averaging between 2.5% to 3%. This makes your current home very affordable in terms of monthly payments and millions of families are reluctant to sell and lose that huge financial blessing especially with the high inflation we are seeing now. Those low mortgage rates are in fact a buffer that has kept many families from having to make painful cuts elsewhere in their budget.
Dallas/Fort Worth has emerged as an economic powerhouse in the United States. Major corporations like Goldman Sachs, Caterpillar, Ameritrade, State Farm, Liberty Mutual, and Chase Bank are moving hundreds of thousands of well-paying jobs into our community. This influx of employment opportunities not only strengthens the local economy but also drives substantial price appreciation in the housing market. Additionally, DFW has one of the lowest cost of living of any major metropolitan area and very pro-business governmental policies which will only add more incentives for this to continue for as far as the eye can see.
Consider this: the average mortgage payment is paying down the principal balance, typically between $800 to $1200 per month — that’s about $15,000 annually building equity in your property. In contrast, market rents often exceed current mortgage payments by $500 to $750 per month, adding an additional $10,000 or more to your net worth each year. Those 2 factors alone total $20-25K per year for most properties.
The gain from NOT selling can be an increase of $30,000 -$60,000 dollars EACH year. I just leased a home in Windsong Ranch in Prosper in July 2024 where the Client will easily make an additional $60,000 per year by NOT selling. Ask and I can show you the home and the math!
Historically, homes in Dallas have shown robust appreciation rates, averaging between 3% to 5% annually.
If we take a median priced home of $400K then even with a conservative estimate of 4% annual appreciation, your home’s value would increase by $16,000 per year over the long haul. Then the appreciation is now compounding off of the higher value. Please look at the graphic to the side showing the anticipated price growth.
Please remember though that as the home appreciates in value the tenant is paying off the mortgage each month!! So as the value appreciates more and more of that is EQUITY to you and your family.
In addition since a rental property is treated as a stand alone business ALL of the expenses relating to that are now tax deductible. Things like homeowner's insurance, repairs, HOA payments, ever driving over to the property is 67 cents per mile in 2024 as is any other driving for business usage. I drove about 25,000 miles per year just on my work car as a Coldwell Banker Realtor and that means a tax deduction of $16,750 dollars so these things add up REALLY quickly.
Take note of the billions of dollars being invested in DFW real estate by some of the world's smartest investors. When Wall Street investment firms pour countless billions into our area, it's a clear signal that DFW real estate holds significant potential for growth and profitability.
Following these institutional investors lead could prove advantageous for your financial future. DFW is projected to surpass Chicago within this decade as the 3rd largest metropolitan area and we are dramatically short of homes as I pointed out in the beginning part of this webpage.
Finally , I was named the #1 Realtor in America for an investment firm that was owned by that massive wealth manager Blackrock. If you remember a few years ago Blackrock and a couple of other Wall Street firms were vilified in the news about buying up all the single family homes. I was intimately involved with that program on many many levels. With that knowledge, which I share with my Clients; I am able to point them to the very neighborhood that Blackrock invested in for a solid long term gain. As a side note... That program was buying homes in 82 Metropolitan areas across America and DFW was just one of the markets. However every year there was a standing policy to deploy 20% of that years purchases into the DFW market. Most people will call that a CLUE! If it is good enough for BlackRock....then it just might be good enough for you!
Warren Buffet just invested over a billion dollars in 2023 into home builders because of our chronic shortage caused by the natural reluctance to sell from current owners with 2.5% mortgages These builders build predominantly in Texas and Florida and those are the two states that millions of Americans are moving to as we speak. As an example.... New York City just last year had a net population loss of 561,000 people... so that is after births and people moving into NYC! These are once in a lifetime changes to America and you can realize the gain by NOT selling.
You’ll have the advantage of working with Rick Baker, an exceptionally experienced Realtor who ranks in the top 4% of all Coldwell Banker agents in the world! With over 25 years of personal investment experience and simultaneous ownership of dozens of rental properties, Rick specializes in building generational wealth through real estate for families like yours.
His guiding principle is simple: if a property is good enough for your family to live in, it's good enough to rent out.
Choosing not to sell your home and converting it into an investment property could potentially yield over $40,000 per year in increased net worth when considering mortgage paydown, rental income exceeding mortgage costs, and property appreciation. In addition each year these numbers compound on themselves because each year because the tenant pays off more of mortgage balance every month and the price appreciation compounds the market value. This strategy aligns with the unique economic trends in Dallas/Fort Worth, where low mortgage rates, unbelievable economic growth, a much lower cost of living when compared with other major cities and a tight housing market caused by once in a lifetime ultra low interest rates have created favorable conditions for current property owners. Look around and everywhere you look there are massive apartment buildings being built by savvy Wall Street firms who already know what I just showed you. Why sell the home and let the new owners brag to their friends about how much the home has appreciated?
Before making any decisions, we encourage you to have a conversation with Rick Baker from Coldwell Banker APEX who can provide personalized insights based on his 25 years personal investing experience that would create generational wealth for your children.
Take advantage of the current economic climate and consider the long-term benefits of holding onto your property. It could be a decision that significantly enhances your financial future.
Are you opposed to getting more information on how to do this?
Elevate your real estate journey with Rick Baker, a top-tier real estate agent renowned for delivering truly remarkable service. Rick empowers clients through personalized insights, navigating the Dallas-Fort Worth real estate market.