Dominion through Property

  Real estate often appears mysterious to first-time investors. Its complexity can intimidate even those with an otherwise confident grasp on personal finance. This confusion stems not only from unfamiliar terminology but also from a lack of biblical clarity on how property ownership fits into a theology of stewardship and dominion. Yet for Christians committed to long-term fruitfulness and influence, real estate presents a strategic opportunity to build wealth that endures and blesses future generations.

Why Real Estate Deserves Your Attention

  Real estate offers a unique combination of characteristics that distinguish it from other asset classes. Unlike stocks or digital currencies, property is tangible. You can walk through it, live in it, improve it, or rent it to someone else. This material reality reflects the biblical emphasis on land as part of covenantal faithfulness. In Genesis 17:8, God says to Abraham, "I will give to you and to your offspring after you the land of your sojournings, all the land of Canaan, for an everlasting possession, and I will be their God."

  Though we no longer inherit land as part of theocratic national promises, the principle remains: faithful stewardship of land and property carries economic, social, and spiritual significance.

  Real estate also offers compelling economic advantages. Investors enjoy the benefits of leverage, using borrowed capital to acquire appreciating assets. They receive rental income and tax advantages, including depreciation and deductible expenses. For families desiring to increase income while minimizing tax exposure, real estate can be a powerful tool. John Owen wrote, "God is the sovereign Lord of all... yet He entrusts men with a stewardship, the faithful discharge of which glorifies Him." Housing meets a basic human need and creates avenues for practical generosity.

What Actually Drives the Market

  Understanding the housing market begins with the basics of supply and demand. When housing is scarce in a desirable area, prices rise. When inventory outpaces demand, prices fall. These fluctuations are influenced by both national and local factors.

  Location consistently ranks among the most significant determinants of value. Proximity to jobs, schools, public transportation, and amenities all impact pricing. The investor must also account for legislation. Zoning regulations, rental restrictions, property taxes, and even environmental policies affect profitability. Christians should be especially attentive here, as laws that distort markets often result in injustices for the poor and vulnerable.

  Interest rates and loan terms shape what buyers can afford. A small shift in rates materially affects monthly mortgage payments, especially when leveraged over thirty years. Federal Reserve policy and inflation trends must be considered. Borrowing costs and market valuations move accordingly. Wise investors will not ignore macroeconomic forces, but they will not be ruled by them either.

Cash Flow and the Caution of the Primary Residence

  Homeownership is often seen as a major step toward financial maturity and long-term wealth. A primary residence can indeed appreciate in value and provide stability for a household. At the same time, it is essential to consider how the purchase impacts cash flow, which plays a critical role in short-term financial health and decision-making.

  Cash flow refers to the margin between income and expenses. When that margin is healthy, families can save consistently, give generously, and invest strategically. If the monthly budget becomes tight due to an overextended mortgage, rising utility costs, or ongoing maintenance, financial flexibility begins to shrink. This strain can slow progress toward other goals, including debt reduction, emergency savings, or additional investments that might yield a greater return in the present.

  A home that rises in value over decades may still hinder wealth-building if it reduces capacity in the early years. Christians are not forbidden from making long-term investments, but Scripture encourages measured steps rooted in current realities. Proverbs 27:23–24 says, "Know well the condition of your flocks, and give attention to your herds, for riches do not last forever." Financial stewardship begins with attentiveness to present resources, not only the potential of future returns.

  Reformed theologians have long emphasized the value of prudence. Richard Baxter wrote, "A wise man doth not leave his estate to hazard upon the uncertain hopes of great advantage." In that spirit, prospective homeowners should evaluate not only the projected equity of a property but also the pressure it may place on the household budget. A home does not become a financial asset until it strengthens rather than restricts your ability to fulfill God-given responsibilities.

  A thoughtful purchase that fits within current means can indeed become a blessing. When timed wisely and approached with diligence, homeownership serves as a solid foundation for long-term fruitfulness. The goal is not to avoid property ownership, but to align it with a broader vision of faithful dominion, present contentment, and wise provision for the future.

Preparing for a First Purchase

  First-time buyers should avoid rushing into the market without adequate preparation. Loan approval depends on debt-to-income (DTI) ratios, which measure how much of your monthly income is already committed to obligations like student loans or car payments. Lower DTI ratios increase loan eligibility and purchasing power.

  Several government-backed loan options exist to help buyers enter the housing market with lower upfront costs and more flexible requirements. VA loans, available to eligible veterans and active-duty service members, offer zero down payment, no private mortgage insurance (PMI), and competitive interest rates. FHA loans, insured by the Federal Housing Administration, are designed for buyers with lower credit scores or limited savings, requiring as little as 3.5% down. USDA loans, aimed at promoting homeownership in rural and some suburban areas, also offer zero down payment but have location and income restrictions. Each of these options reflects a broader principle of Christian stewardship: make use of lawful tools to establish stability, especially for those at the beginning of their wealth-building journey.

  Buyers must also budget realistically. The down payment represents only a fraction of the total cost. Closing fees, inspections, property taxes, moving expenses, and insurance all add up. Timelines can stretch unexpectedly. The average closing process takes 30 to 45 days, sometimes longer. Delays are common, and patience is essential.

  In evaluating homes, prioritize location over features. A modest home in a high-demand area may outperform a luxury property in a stagnant zip code. The market rewards long-term vision, not granite countertops. As the Puritan Thomas Watson wrote, "A godly man holds the world with a loose hand." Real estate should serve your broader vision of stewardship, not define your identity.

Investment Models: From Simple to Sophisticated

  Several strategies exist for those looking to invest beyond a primary residence. Each has strengths, weaknesses, and appropriate contexts.

  House hacking allows an owner to live in one portion of a property while renting out the other units. This model works well for young families or couples starting out. It combines homeownership with income generation.

  Accessory dwelling units (ADUs) and pad splits create additional rentable spaces within a single property. These options require upfront capital and thoughtful design but can significantly increase cash flow.

  The BRRRR method—Buy, Rehab, Rent, Refinance, Repeat—is popular among experienced investors seeking to scale. It relies on value-add renovations and refinancing to recycle capital into new acquisitions. This approach involves greater risk and effort but offers attractive returns when executed well.

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A Note from Covenant Real Estate:

 Many first-time investors drawn to the BRRRR method fail to fully account for two major variables that significantly affect cash flow: non-homestead property taxes and vacancy costs. Unlike a primary residence, investment properties are taxed at a higher rate in most jurisdictions, and the increase can be substantial once the homestead exemption is removed. Vacancy, too, is often underestimated. When a unit sits empty or turns over, landlords absorb not just lost rent, but also cleaning, marketing, and maintenance expenses. Experienced investors and property management professionals typically allocate 25% of gross rental income toward taxes and vacancy for portfolios with fewer than fifteen units. New investors who ignore these factors may find themselves cash-poor and asset-rich, locked into properties that look good on paper but strain their finances in practice. Wise stewardship anticipates these realities and builds in margin accordingly.

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  Short-term rentals can generate higher income in tourist-heavy areas but demand active management and carry greater regulatory risk. Long-term rentals offer stability but often yield lower margins. Your selection should align with your goals, time availability, and tolerance for variability.

  Landlord income is often misunderstood or criticized, yet it represents a legitimate return for assuming both financial risk and operational responsibility. Property owners carry the burden of mortgage obligations, maintenance costs, vacancies, legal compliance, and market fluctuations. The rent they collect reflects not only the value of housing but also the cost of managing uncertainty. For tenants, rent is the most they will ever be required to pay. For homeowners, the mortgage is typically the least they will ever spend.

  Ownership includes unexpected repairs, rising taxes, and ongoing upkeep, all of which fall outside the fixed monthly payment. When landlords price rent, they must account for these hidden variables, not out of greed, but out of necessity. Scripture affirms the principle that laborers deserve their wages (Luke 10:7), and that includes the labor of managing and maintaining real estate. Herman Bavinck emphasized, "God wills that man labor and thereby acquire property, which he must use not only for himself but for others." When rent is fair and the property is well-kept, the income earned is not only lawful but a just reward for service rendered and risks borne.

  Wise investors will build financial projections, estimating income, expenses, and net returns over one-year and three-year horizons. Numbers reveal feasibility. As Proverbs 24:3–4 teaches, "By wisdom a house is built, and by understanding it is established; by knowledge the rooms are filled with all precious and pleasant riches."

Managing, Measuring, and Minimizing Risk

  Three areas require consistent attention: metrics, management, and taxation.

  Key performance indicators include:

• Capitalization rate (Cap Rate): Measures income relative to purchase price.

• Cash-on-cash return: Assesses actual return on invested capital.

• Internal rate of return (IRR): Evaluates total yield over time.

  
  

  These numbers must be tracked and updated as circumstances evolve. Profit is not guaranteed, and assumptions must be stress-tested.

  Property management, whether performed personally or outsourced, affects both profit margins and peace of mind. A poorly managed rental can erode returns quickly. Even one bad tenant or unexpected repair can shift your entire financial forecast.

  Tax considerations also matter deeply. Real estate offers generous deductions, including depreciation, which allows owners to reduce taxable income without actual cash expense. However, tax mistakes can be costly. Consult qualified professionals who understand real estate-specific rules and strategies.

A Theology of Dominion through Real Assets

  Real estate investing is more than a financial decision. It is a form of stewardship that reflects one's theology. Ownership of land, buildings, and dwellings represents dominion rightly exercised. It enables hospitality, family stability, vocational flexibility, and intergenerational blessing.

  Real estate can also foster idolatry when investors trust in equity rather than God. The emergency fund cannot save your soul. The rental property will not preserve your legacy apart from Christ. As Abraham Kuyper wrote, "There is not a square inch in the whole domain of our human existence over which Christ... does not cry: Mine!" So make sure you are growing your real estate portfolio not primarily to pad your pockets or inflate your ego, but to place it as a footstool under Christ's feet.

  Christians must reject the twin errors of prosperity gospel excess and monkish asceticism. Stewardship requires ambition guided by humility, with every decision subordinated to God's law and the advance of His Kingdom. Net worth does not add a jot or tittle to your sanctification, but neither does a modest house make you a godlier man.

Conclusion: Paint the Picture and Count the Cost

  Success in real estate requires more than capital. It demands wisdom, patience, and foresight. The goal is not to own property merely for comfort or prestige but to build a platform for gospel-driven influence.

  Luke 14:28 reminds us, "For which of you, desiring to build a tower, does not first sit down and count the cost?" Real estate is not passive. It is a long obedience in the same direction, a tool for dominion and discipleship.

  Those willing to steward this tool well can expect not only financial return but also spiritual fruit resulting from the discipline it requires. Whether you are purchasing a first home, considering an investment property, or building a rental portfolio, the call remains the same: apply wisdom, act in faith, and build for the glory of God.