Three years ago, John Paulson gave a keynote address at the CNBC/Institutional Investor Conference. In his speech, he told those in attendance that he believes housing will continue its strong recovery for the next 4 to 7 years, saying that:
"The housing market has bottomed. It's not too late to get involved. I still think buying a home is the best investment any individual can make. Affordability is still at an all-time high."
When asked how the average person could take advantage of the current real estate market at the time, Paulson said:
“Buy a home and, if you can, buy a second home.”
Two years ago, Paulson reiterated his statement, saying:
"I still think, from an individual perspective, the best deal investment you can make is to buy a primary residence that you're the owner-occupier of."
Who is John Paulson and why should you listen to him?
Paulson is the person who, back in 2005 & 2006, made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell.
What do others think of Paulson?
According toForbes, John Paulson is:
“A multibillionaire hedge fund operator and the investment genius.”
According to theWall Street Journal, Paulson is:
“A hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.”
So… Is what he said still true?
The core reasons behind Paulson’s statements still ring true today, butwhydoes he believe homeownership is such a great investment?
Paulson broke down the math of homeownership as an investment:
1."Today financing costs are extraordinarily low.”
The latest numbers fromFreddie Macshow us that you can still get a 30-year mortgage at historically low rates of under 4%.
2.“And if you put down, let's say, 10 percent and the house is up 5 percent,”as many experts predict,“then you would be up 50 percent on your investment."
How many are seeing a 50% return on a cash investment right now?
Paulson goes on to compare the long term financial benefits of owning versus renting:
3.“And you’ve locked in the cost over the next 30 years. And today the cost of owning is somewhat less than the cost of renting. And if you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed.”
Whenever a billionaire gives investment advice, people usually clamor to hear it. This billionaire gave simple advice –if you don’t yet live in your own home, go buy one.
Author:Kriste Simmons Phone: 931-561-1103 Dated: May 2nd 2016 Views: 197 About Kriste: I am a licensed Real Estate Agent in TN, and KY with Reliant Realty ERA Powered. I have over 18 yea...
View our latest blog posts in your RSS reader. Click here to access.
About Kriste Simmons & The Simmons Team of Reliant Realty ERA Powered -931-245-8800
Thank you for choosing The Simmons Team for your real estate needs! We make it our mission to provide you with top of the line services in any type of situation. We specialize in the Clarksville, Montgomery County, Fort Campbell and Hopkinsville areas, but will gladly help you with surrounding areas as well. Our local expertise and wide variety of Real Estate knowledge will benefit you whether you are buying or selling for the first or the tenth time.
"I'll start off by saying Kriste is truly an amazing person. We found a house my family and I fell in love with so we decided to start talking to some realtors. The first one we chose was definitely in no hurry to get anything done the 2nd would never answer nor return our phone calls and the 3rd was really rude and tried to force us into a contract right away. We were getting no where until the lending company referred me to Kriste. The lender said if anyone can sale your current home and get you into the new one it would be her. So we called and right away she was willing to meet. After talking to her we knew she was the one we wanted in enter into a contract with. After 4 days she sold my home and had hundreds of people talking about it online. We got to place a offer onto the new one and everything was pretty smooth after that. She truly cared about my family and I and would help with things when most people would just shut their mouth and not say a word because they don't care about anything but the sale and the money to follow. I would highly recommend her to anyone!! Not to mention she knows just about everyone in every profession and I still call her to get numbers or recommendations with things.
Thanks again Kriste!!"