Today’s world is wrought with uncertainty, especially with many global and national events occurring simultaneously and affecting our future and the way we live. Thankfully, some things still remain constant – one of them is a real estate asset. Investing in real estate provides stability and long-term financial growth, making it a more secure option compared to renting.
In a city like Springfield, MO, the benefits of putting your money into property are even more pronounced. This article shows you why.
In the heart of the Midwest lies the Queen City of the Ozarks – Springfield, MO, a city known for its charm, affordability, and promising real estate market. A vibrant community with a thriving economy like Springfield will have you face a key decision: whether to rent or buy.
If you seek to secure your financial future, the decision between renting and investing in Springfield, MO, real estate could shape your long-term prosperity. Renting may offer flexibility but it lacks the long-term benefits of building equity. Additionally, monthly rent payments contribute to the property owner’s mortgage rather than your own investment.
Meanwhile, buying and investing in homes in Springfield, MO, present long-term, unparalleled opportunities for building wealth, stability, and securing a prosperous retirement.
Table of Contents
Benefits Of Real Estate Investing Vs. Renting
Let’s explore the long-term benefits of investing in Springfield, MO, real estate and why it overshadows renting.
Building Wealth: Owning Your Future
A 2023 study by the National Association of Realtors stated that surging home values in the past decade resulted in homeowners becoming richer by more than $100,000 in equity, thus substantiating the long-held idea that homeownership is essential in building household wealth.
The Springfield, MO, real estate market has historically shown steady growth. With the NAR study’s findings in mind, the city has what it takes to let investors build wealth over time through several venues: rental income, property appreciation, and strategic investment decisions.
RENTAL INCOME: A STEADY REVENUE STREAM
Imagine your Springfield property generating a regular income stream – that’s the power of rental properties. By renting out a single-family home, duplex, or multi-unit building, you create a passive income source that significantly contributes to your financial goals. This rental income allows you to cover your mortgage payment, generate additional cash flow, and create a buffer for unexpected expenses.
PROPERTY APPRECIATION, CAPITALIZING ON MARKET GROWTH
When you buy houses for sale in Springfield, MO, you’re not just paying rent. Instead, you’re investing in a tangible asset. As the Springfield, MO, real estate market continues its upward trend, your property is likely to appreciate over time. In line with that, you also build equity –the difference between what you owe and the home’s value. This equity translates to wealth accumulation, setting you on a path to financial security. When you decide to sell, you will profit from the difference between your purchase price and the increased market value.
STRATEGIC INVESTMENT DECISIONS, LEVELING UP YOUR WEALTH-BUILDING
Real estate allows you to go beyond simply owning a home. With strategic planning, you’ll be able to unlock more wealth-building opportunities.
- House hacking: Live in a multi-unit property and rent out the remaining units to generate rental income that helps offset your mortgage payment. This strategy allows you to get your foot in the investment door while living in a portion of the property.
- BRRRR (Buy, Rehab, Rent, Refinance, Repeat) method: This strategy involves buying a distressed property, renovating it to increase its value, renting it out to generate income, refinancing the property to pull out cash based on the increased value, and repeating the process with another property. This allows you to build a portfolio and leverage your initial investment for further growth.
- Fix and flip: Purchase undervalued properties that require repairs or renovations. Fix them up to increase their market value and then sell them for a profit. This approach requires more effort but has been proven to be lucrative if done strategically.
Stability And Security: A Place To Call Your Own
Renting often comes with uncertainties. Landlords may decide to raise rent or choose not to renew the lease. But if you own a home in Springfield, this setup provides a sense of stability and security. You control your living situation and have peace of mind, knowing that you are building roots in your community and enjoying the benefits of long-term residency. This stability allows you to focus on your life’s goals without constantly worrying about finding a new place to live.
INVESTING IN YOUR FUTURE
The Springfield, MO, real estate market offers a solid platform for wealth creation. Every mortgage payment you make contributes to equity in your home. As property values appreciate, your equity grows, creating a valuable asset. This equity translates to financial security and opens doors to future opportunities. You may leverage your equity through a home equity loan or line of credit to finance further investments, education, or even home renovations.
BECOMING PART OF THE SPRINGFIELD COMMUNITY
Owning a home fosters a deeper connection to your community. You become invested in the neighborhood’s well-being and take pride in maintaining your property. This sense of ownership encourages participation in local events, involvement in homeowners’ associations, and building relationships with neighbors. Over time, your home transforms from a building into a cherished space where you make memories and nurture friendships.
Springfield boasts a vibrant community known for its friendly atmosphere and strong sense of place. Owning a home here allows you to become an integral part of the community and its history. You will have the opportunity to connect with like-minded people, get involved in local initiatives, and contribute to the city’s growth. This sense of belonging adds another layer of richness to your life, fostering a sense of purpose and connection.
A COLLEGE AND HOSPITAL TOWN
One of the most interesting reasons why Springfield, MO is an ideal place for real estate investment is the existence of highly esteemed academic institutions and top-rated healthcare facilities in and around the area. The academic communities (students, faculty, and staff) from these colleges and universities and healthcare personnel who desire to live closer are compelled to rent within the vicinity, thus resulting in the number of renters in the city overtaking homeowners (60.3% renters vs. 39.7% owners). Investing in real estate in Springfield allows you to maximize your potential gains from the influx of potential tenants in the city and create passive income opportunities.
Below are some of the colleges and universities serving Springfield, MO.
- Missouri State University
- Drury University
- Ozarks Technical Community College
- Evangel University
- Cox College
- University of Missouri Extension
Meanwhile, the CoxHealth System is Springfield’s premier facility for a whole range of health services. With more than 40 clinics, pharmacies, specialty centers, and hospitals scattered throughout the city, residents may rest easy, knowing that a CoxHealth facility is just near whenever they require medical attention.
Tax Benefits And Financial Incentives
Owning a home comes with attractive tax advantages. We, as homeowners, are allowed to deduct mortgage interest and property taxes from our overall tax payables. This translates to significant savings, putting more money back in our pockets. Additionally, government incentives and programs aimed at homeownership could significantly reduce tax liabilities and upfront costs.
Let’s say you eventually decide to sell your Springfield home and make a profit. The capital gains tax usually applies to these profits. However, there is a bright spot for homeowners. If you have lived in your primary residence for at least two out of the five years leading up to the sale, you may exclude a significant portion of the capital gains from taxation. This exclusion saves you money when you sell your home.
Hedging Against Inflation
Real estate serves as a reliable hedge against inflation. Unlike rent, which may rise with inflation, many mortgage payments typically remain fixed throughout the loan term. In Springfield, investing in real estate offers a tangible asset that retains its value even during economic uncertainty. This predictability protects you from the eroding effects of inflation on your housing costs.
Personalization And Freedom
When renting a property, especially in some apartments and condominiums, there are rules and regulations that you should comply with. But what if you want to paint your walls in your preferred shade, or you want a garden or do some renovations and upgrades? The possibilities are endless when you own your home. You have the opportunity to personalize your space to suit your needs and desires, creating a true reflection of yourself. Owning your home also gives you the flexibility to make some adjustments and expansions as your family grows.
Planning For The Future: Your Retirement Nest Egg
Investing in real estate forms a crucial component of long-term financial planning, particularly for retirement. Rental income from investment properties could become a stable source of passive income during retirement years, ensuring financial security and independence.
A paid-off home in Springfield provides significant financial security in retirement. Without a mortgage payment, your monthly expenses decrease significantly, freeing up more income for the best years of your life. Additionally, you could potentially downsize later on and utilize the equity from your home to fund retirement plans comfortably.
The Net Worth Advantage: Homeowners Vs. Renters
The latest Survey of Consumer Finances (2022) by the Federal Reserve Board revealed that the median net housing value jumped by 44.55% from $139,100 in 2019 to $201,000 in 2022, driven by the general increase in home values and low housing debt during the period. This is said to be among the highest levels seen historically, and proof of homeowners’ big advantage over renters in terms of net worth. Owning real estate allows you to build wealth through asset growth, equity appreciation, and tax benefits, putting you on a stronger financial footing for the long term.
Buying Springfield, MO, Real Estate
Springfield, Missouri, boasts a thriving real estate market characterized by affordability, steady appreciation, and diverse housing options. With a competitive median home price, Springfield is an attractive destination for both home buyers and seasoned investors. With a robust economy, low cost of living, and a strong sense of community, Springfield stands out as a prime location for individuals seeking to purchase a home, with plenty of options to choose from.
Navigating the Springfield Market
Reports suggest that Springfield is leaning toward a balanced market. This means the number of houses for sale in Springfield, MO, is roughly on par with buyer demand. This translates to a landscape where buyers and sellers are on equal ground. While there are fewer chances of bidding wars for homes on the market, buyers still need to present striking offers that will garner sellers’ attention. Having an expert Springfield, MO Realtor by your side in your real estate transaction will make all the difference, especially in terms of making a strong offer and negotiating for your best interests.
The median listing price of homes in Springfield has been hovering around the $195,000 to $285,000 range in the past three years, reflecting a history of steady growth. It is important to note that prices vary significantly depending on the neighborhood, size, and property features.
Despite the balanced Springfield, MO market, homes have been snapped up much faster than during the first two months of the year. As spring transitions to the summer, even more activity is expected in the market with people becoming more enthusiastic toward actively going out to view houses for sale personally. As of March 2024, it only took around a month (31 days) from the time a property was placed in the market up to the actual sale. Compare this to January when the selling period took as much as 55 days. This highlights the importance of acting swiftly if you find a home that meets your needs.
Springfield is a collection of distinct neighborhoods, each with its respective character and price range. That’s why researching these neighborhoods is vital. Consider factors like proximity to schools, amenities, and your desired lifestyle when narrowing down your search. Your Springfield, MO Realtor should provide invaluable insights into specific areas and hidden gems within the city.
Benefits Of Buying A Home In Springfield
Here’s a glimpse into what makes owning a home in Springfield, MO, truly special.
Outdoor Paradise
Nestled in the Ozark Mountains, Springfield boasts a haven for nature lovers. Homeownership allows you easy access to stunning parks like Nathanael Greene/Close Memorial Park & Lake Springfield for hiking, biking, boating, and fishing. You could also turn your backyard into a personal outdoor oasis, perfect for barbecues, stargazing, or simply enjoying the fresh air.
A City on the Move
Springfield is a hub for culture and entertainment. Owning a home here puts you at the center of it all. The Downtown Farmers Market is a short drive away, offering fresh produce and local crafts. The Springfield Art Museum and Historic Walnut Street are within reach for a dose of culture and history. Concerts, festivals, and sporting events are a regular occurrence, ensuring there is always something exciting happening.
Strong Rental Market
If you are considering renting out your property, Springfield’s rental market presents a lucrative opportunity. With a growing population and steady demand for rental housing, you may expect favorable rental yields and occupancy rates, contributing to the long-term profitability of real estate investments.
Affordability
Compared to those in many other metropolitan areas, housing in Springfield is notably more affordable. The city’s median home prices are within reach for a wide range of buyers, offering homeownership opportunities that may be out of reach in larger markets. Additionally, low property taxes contribute to the overall affordability of homeownership in Springfield.
Stable Appreciation
While some real estate markets experience volatile swings, Springfield’s housing market has demonstrated stable appreciation over time. Home values in Springfield tend to appreciate gradually, providing a reliable long-term investment that preserves and grows your wealth.
Diverse Housing Options
Springfield, MO offers diverse housing options, from cozy bungalows to sprawling estates, that cater to different preferences and budgets. From historic homes in charming neighborhoods to modern developments with state-of-the-art amenities, you have ample choices when finding your ideal home in Springfield.
Thriving Economy
Its economic vitality contributes to the overall desirability of the Springfield, MO real estate market. With a strong presence in industries such as healthcare, education, manufacturing, and retail, the city offers a stable job market and opportunities for career growth, further enhancing the appeal of homeownership.
Family-Friendly Environment
Springfield is renowned for its family-friendly environment, with top-notch schools, abundant recreational activities, and a tight-knit community. For families looking to settle down and establish roots, the city’s welcoming atmosphere and amenities make it an ideal place to call home.
Lower Cost of Living
BestPlaces.net places Springfield, MO’s cost of living score at 83.9, lower than both state (85.6) and national scores. Moreover, the city takes the fifth spot among the top emerging housing markets in a Spring 2024 ranking created by Realtor.com and The Wallstreet Journal. These figures are a testament to the high quality of life Springfield, MO residents enjoy without breaking the bank and the promise of high yields from their real estate investment.
Top Neighborhoods in Springfield
WEST CENTRAL
Nestled in the heart of Springfield, this neighborhood offers a variety of housing options, from historic homes and charming bungalows along tree-lined streets to modern lofts and apartments. Just a short walk to the Downtown Farmers Market, Springfield Art Museum, and different local shops and restaurants, this neighborhood is perfect for those who crave an urban vibe. Several parks, including Landers Park and Robberson Park nearby, provide an assortment of green spaces for picnics and family outings.
MIDTOWN
This area is home to excellent learning institutions like Central High School and Drury University and boasts a strong sense of community. Spacious, well-maintained homes with large yards are a common sight. Public spaces like Lesterson Park and Fellowship Park offer ample green space for kids to play. The variety of housing options in Midtown will also appeal to those who seek both Old-World charm and a lot of character in a neighborhood.
LAKE SPRINGFIELD
The most prominent area for waterfront living in Springfield, MO, Lake Springfield offers a variety of prime properties, from grand estates to smaller single-family homes. Given the community’s location along the banks of its namesake lake, residents have the distinct opportunity to engage in a variety of water activities, including boating, fishing, and kayaking. Even with the lovely lake views that one would usually see in the outskirts, living here still keeps residents near the city’s amenities like retail and dining places, as well as healthcare facilities.
HIGHLAND SPRINGS
Considered one of the most prestigious neighborhoods in Springfield, Highland Springs is a gated golf community located in a more peaceful section of the city that offers scenic views and wide-open green spaces. Its location strikes a balance between access to urban conveniences and the tranquility of Suburbia. Living here, you get the chance to apply for membership to the Highland Springs Country Club, this exclusive enclave’s centerpiece, which provides upscale amenities (a Robert Trent Jones Jr.-designed golf course, tennis courts, a swimming pool, and dining options at the country club) and elevates your luxurious lifestyle.
Ready To Make The Move To Springfield? Some Resources To Get You Started
Local Realtors
Working with a knowledgeable and experienced real estate agent is crucial. They are duty-bound to guide you through the Springfield market, understand your needs, and help you find the perfect home.
Mortgage Lenders
Shop around for a lender who offers competitive rates and terms that suit your financial situation.
City Resources
The City of Springfield website offers valuable information about neighborhoods, schools, and other factors to consider when buying a home.
Find Your Next Springfield, MO, Real Estate Investment With Flat Fee Redefined
The benefits of owning a home in Springfield, MO go far beyond the temporary nature of renting. It is an investment in your stability, financial future, and place within a thriving community. With a resilient market, favorable tax environment, and diverse investment opportunities, real estate ownership in Springfield represents a prudent strategy for securing your financial future and building lasting wealth.
Consult Flat Fee Redefined, your team of real estate experts in Springfield, to explore your options and unlock the door to long-term financial growth and security. Trust us to provide comprehensive guidance so that you may navigate the Springfield, MO market effortlessly.
Let’s find your dream home now! Call us at 417.520.6545 or send us a message.