Many believe you either must be wealthy or an experienced Realtor to invest in the housing market. On the contrary — you don’t need to fit either of these criteria to build your net worth. When you diversify your investments with real estate, you avoid counting on the meager interest rates yielded through savings accounts or putting your portfolio at risk with the stock market’s volatility.
The key to choosing the most suitable real estate investment is to consider your goals, budget and risk tolerance. A savvy real estate agent can help you find undervalued properties that will offer the most profit and/or cash flow.
The top benefits of investing in real estate are:
Financial security – Real estate generally appreciates, as we have seen dramatically over the past two years. Of course, there are times when home values fall, but the market typically bounces back. If you are prepared to hold your investment long term, you likely will see appreciation and greater profits when it comes time to sell. Many people use real estate as part of their retirement plans because they can sell or rent to supplement retirement income.
You’re the boss – Unlike the stock market, where you rely on the company you invest in and the whims of investors, real estate lets you control rental income and how long you own the property.
Tax benefits – When you invest in real estate to buy, hold or rent, you can write off your expenses as a business owner.
FLIPPING AND RENTING
Fixer-uppers are another investment opportunity for either flipping potential or a rental income stream. Remember that you will need a budget to buy and renovate the property. Having a network of professional contractors to either consult about the repairs or complete them is a must.
For flips, be sure you know the potential value after renovation to be sure you walk away with a profit. If you are considering rental properties, a Realtor can help you find those that are tenant-occupied, saving the step of finding occupants.
GENERATIONAL WEALTH
Sometimes referred to as family wealth or legacy wealth, generational wealth includes financial assets passed down from one generation to the next. You can accumulate generational wealth through real estate investing. Doing so is a great benefit for all on the receiving end, especially young adults just starting out, as they can use the funds through the real estate sale or rental income to help pay for college, start a business or make a down payment on a home.
Susan Siemiontkowski is a Realtor with Coldwell Banker Alfonso Realty. Reach her at (228) 239-2621 or susiesellsthecoast@gmail.com.
