Why I Wouldn't Sell If I Bought Before 2020: Consider These 3 Strategies First
If you purchased a home before 2020, you likely locked in a golden opportunity with lower purchase prices and historically low interest rates. Selling now might seem tempting, but before you put up that "For Sale" sign, consider how you can maximize your investment and elevate your lifestyle without giving up your property. Here are three strategies to explore:
1. Cash-Out Refinancing: Unlock Your Equity to Upgrade Your Lifestyle
Your home’s equity can be a powerful tool for reinvesting in your current property or diversifying into other investments.
Upgrade Your Existing Home
Why start fresh when you can transform your current space into a next-level luxury retreat? Use your home’s equity to remodel or expand. Imagine adding:
- A resort-style sand pool with zero-entry access, a tanning deck, and cascading waterfalls.
- A gourmet kitchen with top-tier appliances, sleek finishes, and the space to host lavish gatherings.
- Additional rooms or entertainment spaces designed with sophistication and comfort in mind.
Turn It Into an Income Stream
Consider cashing out equity to invest in another property while keeping your home as part of a rental portfolio. With the growing demand for high-end properties, your existing home could bring in significant income if you rent it out.
2. Mid-Term Rentals: Earn Big Without a Long-Term Commitment
Luxury homes are in high demand for mid-term rentals, especially for corporate executives, traveling professionals, or those seeking an upscale temporary stay. Many rentals in the luxury market start at $12,000 per month or more, offering an excellent income stream while maintaining flexibility.
This strategy allows you to hold onto your property, cover expenses, and possibly even fund the purchase of your next home—all while maintaining the long-term appreciation potential of your current asset.
3. Refinance for a Down Payment: Make Your Next Move Smartly
Refinancing your current home at today’s equity value could free up cash for the down payment on your next dream property. This approach allows you to:
- Retain the investment potential of your existing home.
- Secure a new luxury residence without completely parting ways with your previous investment.
By leveraging your current property, you set yourself up to benefit from both homes’ appreciation over time, expanding your real estate portfolio without losing equity gains from your initial purchase.
The Power of Homeownership: A Unique Position of Wealth
According to recent data, 38.5% of homes in the United States are owned by individuals mortgage free, not banks or corporations. That means millions of Americans hold a significant position of equity and wealth—a financial advantage that’s increasingly rare in today’s economy.
Your home represents more than just a place to live; it’s a cornerstone of your financial future. Letting go of it should only be a last resort. Holding onto your property allows you to retain control over a powerful wealth-building asset while continuing to enjoy the luxury lifestyle you’ve already invested in.
Bonus Tip: Only Sell If It’s Truly Worth It
If you’re considering selling, set a high bar. I recommend only selling if you can make three times your original purchase price or more. If you bought before 2020, this might not be as far-fetched as it sounds, given recent market trends. If that’s not achievable, one of the three strategies above might be a better route to explore.
Final Thoughts
The real estate market continues to evolve, and your luxury home is an asset with enormous potential. Selling isn’t your only option—upgrading, renting, or refinancing can unlock new opportunities for wealth and lifestyle enhancement. Before you decide, weigh your goals, assess market conditions, and consult with a knowledgeable real estate advisor.
After all, your "next dream home" might already be the one you’re living in—it just needs a little reimagining.
