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Did you know that your home is an investment? When you purchase real estate, you are purchasing an appreciating asset. That is, it’s going up in value over time.
Contrast this with other items you buy that are constantly losing value: cars, clothes, and electronics. There’s always something shinier and newer coming out, but you seldom have anything to show for those purchases after a few years.
In 2010, the average price of a home in Calgary was $474,000. In 2015, that number was $542,000, for an average annual appreciation rate of about 2.3% per year. It usually takes a 5% down payment to buy a home, so in 2010, a buyer would have had to have access to $23,700 to buy an averagely priced house. That $23,700 down payment allowed the buyer to acquire an asset worth $474,000; that asset then appreciated for five years at 2.3% to eventually be worth more than $68,000 than what the buyer originally paid. If you take $68,000 over $23,700 would be a total return of about 287%, almost tripling the original investment. By almost any standards, that is a fabulous return!
This high return on investment highlights two key factors, appreciation and leverage, that allow you to use real estate to put your money to work for you, and achieve impressive results! If you would like to take advantage of homeownership, give us a call or shoot us an email. We would love to help take advantage of the Calgary market!
