Fun with Real Estate Numbers

I had promised last week there were more revealing numbers to be found. Well, they're here. I've always maintained that there is a lot of information out there, but really it's only information that touches you the most personally that counts.

Warren Buffett doesn't care that the market's going down if he's secure in his own investments. And that's really the message I've been trying to get to people that write in with bad news every week.

I wish you would take it to heart.

Here are some numbers to make you happy.

With a little research, I found out that one my rental properties was bought in 1977 for $25,000. The same family held it for 28 years or so until we bought it in 2005 for $258,000. Today it is worth $260,000. Yes, not much appreciation in the past few years, but overall for the last 30 years, it has appreciated on an average at 8% a year. (On the total price, NOT the money invested. That's an important difference to remember!)

Surely, that's kept way ahead of inflation.

Here's another example: my husband bought his first home (from HUD) in 2000 for $55,000. Today it is worth $230,000 and is rented out. The total price appreciation on that home since 1995 (that's as far back as county records will go for that house) is 11% - and we're not even figuring how much the return is on the amount invested by my husband ($5000 - again, a very important difference.)

Hey, just trying to be conservative here and pointing out to the fact that I'm being conservative.

Sure, there are maintenance costs and other repairs to be made but there's also the various tax benefits that offset our income to this day.

The fact remains that real estate is a solid investment any way you look at it. And market downturns like the one we're having today is when you should be looking to buy.