Dear William / Be smart, buy now!
We received questions from a buyer and a seller separately and decided to respond to them both together. William offers serious advice that is practical for all kinds of scenarios in real estate. Check it out! If you have a question you’d like us to respond to, email william.ashman@avenue8.com.
Dear William @ Rubel Ashman Group,
I am renting until the market comes down. Plus, there is no inventory. I’ve got the cash but I think I’m going to wait. What do you think I should do?”
-Mark J - West Hollywood
“Dear William
Sure it’s a great time to sell my house but I have nowhere to go. Everything is expensive. So now what?”
-Julie A. - Del Rey
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“Dear Mark and Julie,
We decided to write back to both of you together since you’re experiencing the market in very different ways and this will give you a bigger perspective. The best advice is to buy something now and don’t try and time the market. Live your life now for you and make some smart money moves.
Why in the world are would-be buyers paying rent in LA? Why are sellers who would rather move holding on to their property so much and say they can’t find somewhere else to live?
Here’s the deal from a larger picture beyond just you. Lots of would be first time homebuyers are sticking it out in Los Angeles in their rentals instead of buying with millions in their accounts. We see it all the time. This is driving up rent too because tenants are offering more to beat out competition. They’re all hoping that the markets going to crash, interest rates will drop and that finally they will be able to buy their property. Big mistake. Money doesn’t grow unless you do something with it.
We’re here to tell you a “crash” is likely not going to happen and if rates eventually drop, you can expect home prices to increase 20% or more in value over the next few years. Crazy right? Buy something. You don’t have to buy a house for yourself but you should buy something and get tenants to pay for the bills.
The only people that actually win in the long run in real estate are people who buy because you always make money when you buy because the idea is to hold onto the property unless you’re trading or have to. Buy anything. Who says you have to live in it? Buy a rental.
The same rule applies to homeowners. Gone are the days where your home is your biggest asset. In most cases, properties are carrying tremendous equity and if you’re scared of interest rates, you should be more scared of losing your equity in the short term.
Buy more property with the equity that’s sitting in your property and if the market does shrink in any form, that will also mean your equity will shrink but your portfolio will have grown and in the long run, you will have built more equity.
By leveraging your equity now and purchasing property that makes rental sense, this would be the perfect time to be reinvesting in your portfolio and make smart financial decisions for your future health.
It’s also a great time to just sell off property you simply don’t want anymore. Home prices are selling for top dollar because there is limited inventory and a lot of trust fund money is out there ready to scoop up property for way over asking if it’s dolled up properly. We are seeing double digit increase % over asking price when we market the property the way we need to.
If you don't need to be in LA, you should consider selling and moving for several reasons. But if you’re renting here maybe you can find a more affordable place in a better area in California to buy if you’re working from home. There’s all kinds of ways to buy - but please make some money moves in real estate instead of just letting your money just sit there.”
- William Ashman, Rubel Ashman Group