We’ll note that the vast majority of assets you anticipate to appreciate will do so at a slow pace. For this reason, don’t try and make this a get-rich-quick scheme, but rather something you genuinely want to buy into or see develop financially. For example, buying a rental home in a neighborhood you love can be an excellent way of having a stake there, while also having something you can acquire funds from. Remember, appreciating assets are often the ‘fun’ things we get to buy…and whether that’s a new painting, a house, or even a vintage Corvette, embrace this as an opportunity to go in on something you’ve always wanted.
While it’s fine to buy with your heart, that also needs to come with an eye for the numbers too.
After all, just because you fall in love with a house or antique doesn’t necessarily mean your assumption that it appreciates will ring true. It’s important to study the numbers, factoring in what exactly will give you a solid ROI in the long-run. If you do plan on only holding an asset to flip, have a projected date when you’re aiming to sell based upon previous data of sales. Just because something appreciates overall doesn’t mean it won’t have up’s and down’s along the way, and just like the stock market, it’s a patient person’s game.
An excellent example of affordability is the real estate market. As a piece of property isn’t going anywhere and the world’s population steadily needs places to dwell, the value almost always goes up. However, there’s a lot to take into account when assessing the ROI on a piece of property; for example, if you have a house that’s maxed out on its historic tax credits and isn’t worth fixing up, then in some cases it’s best to demolition it and builds a new place from the foundation up. Even without renovations, regular costs and maintenance expenses are a significant portion to consider as well, especially if you’re looking to up the value long-term. The price equation here deals with estimating reasonable costs over the years, which might take some consultation if you’re looking into buying assets that have a lot of complexities to maintain their price.
Nothing appreciates drastically overnight.
Unless you’re an expert daytrader, anything you’re buying into will most likely take years to truly see the value on your return. For this reason, it’s smart to kickback and buy into things you like and trust, proving them to be worthwhile in the long run. As speculation only leads to buying into whatever the herd is trying to get rich off of, it’s better to just let the money accumulate around your asset for years to come, giving you a true investment to enjoy.