The Expert Podcast

Did you work hard at your job today? Did you work six, seven, eight hours—maybe a second job? And how much money did you make? How much money did you make this week? How about all last year?

Well, it seems that for the first time in history, a piece of real estate—a home—earned more for their owners than they made at their jobs. So if you owned a piece of real estate last year, the value increase of that real estate turned in more income, more value, more personal wealth than you made from your job—and that was tax-free money.

Your job probably had withholdings from it—federal taxes, FICA—whereas primary residence real estate doesn't have taxes. That money is tax-free as long as you live there for two years. Is that a reason to buy any kind of piece of real estate? Because this isn't going to change anytime soon. This happened last year—probably going to happen next year too.

Here's why: mortgage rates bumped up again above four percent. That's not the end of mortgage rates. People are going to be scrambling to get into real estate before the rates go up to five, six, maybe even seven percent in the next few years. It's not going to affect the value of houses; it's just going to affect how many people are chasing them.

If you were looking at real estate, would you be the only one? No. Guess what—your distracted co-workers are probably on Zillow. Remote work’s most insidious addiction just might be real estate. According to Zillow, people are all over their site. A self-described Zillow addict works from her current apartment as a cartoon show writer, and her lunchtime browsing recently escalated to booking showings on breaks. You blink your eyes and it's like, "Oh my god, I need to go back to work," because they're too busy looking at real estate.

What's going to happen with the market? Well, the growth for the typical home exceeded inflation-adjusted pre-tax income. Home values surged last year. Now, they say it's because of low mortgage rates—but that's not the only reason. People are looking at real estate in a different way.

If you're not going to work, you're not going to your job, and you can have remote work, it's now more important that your home is something you can count on. If you live in an apartment that you're renting, you can't count on it. Your landlord could double your rent at the end of your lease. They could not renew your lease at the end of your term.

So having a home where you don't have to worry about the payment going up, you don't have to worry about not being able to live there, is important—plus you make money on it. Surge in home prices—now that was last year.

The question you might have is: well, what's going to happen next year? You can look at our other videos where all of the economic indicators are pointing toward the same thing happening in '22 and '23 and beyond.

If you think you can't buy a house because you can't afford it, you can look at our examples. $200,000 houses all over the country—you'll have a mortgage payment of about $1,000, which will be less than your rent. And you can usually get into that house for a down payment equal to first payment, last, and security on most apartments.

U.S. homeowners—even with mortgages—gained $3.2 trillion in equity in 2021. That's a big deal. Even if the home price that you purchase doesn't go up at all in the next two years—which is unlikely—you'll save hundreds of dollars a month on rent if you buy the right house. And you'll be paying money toward your mortgage, not toward somebody else's—landlord's—profit.

This is an urgent time to get into real estate. Not in a speculative way. You're not looking to flip a house or to find another sucker to pay more than you. This is self-preservation. This is financial literacy. This is you taking your $1,200, $1,400, $1,500, $2,000, $2,500 a month that you're paying to somebody else in rent and paying it to yourself in terms of equity.

It's very likely that home prices will go up—but this strategy benefits you if home prices go up, or even if they don't. Even if home prices go down—which is so unlikely—you'll still come out ahead in terms of your net worth.

Because here's why: if the home price went down—and how much can a $200,000 house go down? It's not going to go down that much. Even if it goes down, you don't have to pay that money out of your pocket. If you buy a house for $200,000 and two years from now it's worth $190,000, it's not like you have to pay $10,000. It just means that that's the arbitrary value of the house.

At least in the meantime, you're paying less rent, you're paying less monthly cost. And in the long run—which is very likely if inflation continues like we've talked about—and that house is worth $240,000, $250,000, $260,000 and you do want to move, now you can put that equity to work for you to buy a house that’s more of an upgrade.

Don’t worry that that $200,000 house isn’t exactly what you want. It’s not your dream house. A house is not about a dream—it’s about a reality. Is your apartment a dream apartment? Is your rental a dream place to live? Probably not. So don’t worry about a dream—worry about finances, worry about hard numbers. Do the math and come out ahead.

I'm not trying to be harsh—we're just trying to give you an option to where you can, from our last video, turn a $200,000 house into becoming a millionaire in terms of increased value and savings.

Keep an eye on our channel for list of houses in different areas that are all around $200,000. And we're not brokers. We're not trying to sell these houses. We're not realtors. We're not trying to sell you anything. We're just giving you a strategy to upgrade your life and upgrade your finances—and give you a nest where you can count on being.

No one's going to kick you out. No one's going to raise your rent. And if it’s a single-family house, you're not gonna have neighbors right on the other side of your wall or above your ceiling—a little more elbow room.

Hope this is helpful. Subscribe to our channel so you get notices when we post more examples of houses for sale. The next one is going to be $200,000 houses within a mile of the beach in a warm weather climate. That sounds interesting, doesn't it?