Each March, we celebrate women in recognition of National Women’s History Month. Here at The Rueth Team – Fairway Independent Mortgage, we use this time to celebrate all the fearless females taking the initiative to buy and possibly sell, homes on their own, In addition to the boss women out there building their wealth through real estate in 2019.
Purchasing real estate to rent out is an ideal way for you, or your clients to invest money and build sustainable wealth. For this process to work, it is key to encourage clients to invest in a property (or multiple properties) that pull in more rent each month than the expenses of ownership. By doing so, your clients’ ‘cash flow’ is positive and, at the end of the day, they still have the property equity without paying the mortgage.
In 2018, according to the National Association of REALTORS®, single women made up 10 percent of all first-time homebuyers – only two percent of all first-time homebuyers were single men. With this trend continuing into 2019, below are a few tips for your clients who are women (or anyone) looking to build their wealth through real estate.
Savings Up, Debt Down…And Stop Spending
To begin building wealth through real estate, clients must acquire their first property. To do this in a financially successful way, whether the property is a primary residence or to sell/rent, your clients need to have some things in place first.
- Build savings: Lenders will want to see that your clients have some cash in savings before buying.
- Lower credit card balance: A utilization rate below 20 percent will help your clients qualify for a better mortgage rate.
- Pay down other debts: The less your clients owe on student loans, car loans and the like, the higher their FICO score will be and the lower their debt to income will be.
- Stop buying “wants”: Encourage your clients to focus on what is absolutely essential and to avoid the more frivolous purchases in the months leading into a real estate purchase.
The biggest mistake millennials are making is avoiding buying their first home altogether. If your clients want to build real financial security, real wealth for their lifetime, then you should encourage them to get in the real estate game. In fact, according to best-selling personal finance author David Bach, homeowners are worth 40 times more than renters. So, encourage your clients to get out there and buy – and be responsible about it.
All in all, we all know the home buying process can be overwhelming. Using these principles as a baseline for educating clients, you can provide value encouraging them to make smart investment choices that result in increased wealth.
We’re here to empower females on this real estate journey. If your client is in search of their first property, The Rueth Team is here to assist with the loan process. Don’t hesitate to reach out!