4 Reasons to Consider Investing in Real Estate

Many serious investors are looking for ways to diversify their investments. Once you have maxed out your IRA or 401(k), you might look into investment strategies that do not involve more stocks and bonds. One popular way to diversify an investment portfolio is to purchase real estate. Investment properties can help increase your net worth over the long term, but they also have the added benefit of increasing your monthly cash flow.

Parents may also be considering buying a home for their young adult children, who can pay rent to their parents, perhaps splitting it with a roommate. Read on to learn about some of the reasons that investing in real estate is a great idea.
real estate investment
Reason #1: Real estate can boost your monthly cash flow

A real estate investment can increase your monthly cash flow in the form of rent. This is a major selling point for many investors, since they may not reap the benefits of traditional investments until much later in life.

That being said, do not underestimate the cost of owning and managing a property. In addition to your mortgage payment, you will be responsible for property taxes as well as ongoing maintenance on the property. Some years, this might be a very small amount, but you should make sure that you are prepared for inevitable, pricey repairs as well. A good rule of thumb is to save between 10 and 20 percent of your rental income for future maintenance issues. In the long term, you will want to ensure that the rent payments you collect are enough for you to cover all of these costs and have a little extra left over as profit.

Reason #2: Real estate is an appreciating investment

While some markets can become stagnant or temporarily decrease in value, the long-term real estate market trend usually follows an upward trajectory. Over time, your property is likely to increase in value, allowing you to make more money if or when you eventually sell the property. As with most investments, there are no guarantees; but real estate can be an important part of a long-term investing plan.

Reason #3: The longer you own an investment property, the more profitable it becomes

Every investor’s goal is to increase his or her monthly cash flow and, in the long term, increase his or her net worth. Achieving this through investment properties becomes easier the longer you own a property. This is because rent prices and home values typically rise over the long term, but a fixed-rate mortgage remains the same.

Reason #4: Investing in real estate can provide immediate gratification

Some people prefer to own something concrete rather than relying on the volatility of the stock market. As long as you have a well-planned strategy for how you will pay the costs associated with your investment property, real estate is a relatively safe and stable investment.

If you have extra money that you would like to invest outside of your more traditional investments, and have carefully considered your long-term investment strategies and the risks involved, give us a call about properties you can buy to improve both your long-term investing prospects and immediate cash flow.

Seven Ways to Choose the Right Neighborhood for You

If you’re starting a family, you might want to consider a neighborhood known for its good schools. Or if your children have graduated, you might want to move to a “hipper” neighborhood. Perhaps your company has moved, and you want to be closer to work. Any of your priorities may have changed over the years. Here are seven ways to evaluate a possible move.
choosing the right neighborhood

Here are seven ways to choose the right neighborhood for you and/or your family

#1: Time the Commute to Your Job

Perhaps you have been spending hours stuck in traffic to and from work and are looking for a much shorter commute. Just because one neighborhood is closer does not mean that you will get there faster. Time the commute from the different neighborhoods you are considering.

#2: Read About the Local Job Market/Main Industries

Having a job today does not guarantee that you’ll have one tomorrow. And even if you do, it’s important to know if you are moving into a neighborhood that is growing and thriving or one that is crumbling. Get a local paper and read about the main industries in the area and the state of the local job market.

#3: Go for a Walk Around the Neighborhood

One of the best ways to pick the best neighborhood is to look around it. Go for a walk and drive through the neighborhood on the weekend and on weekdays. Do the same thing at different times of day. Note where there are areas that look a little unsafe or dilapidated. How will that affect your quality of life there?

#4: Meet the Neighbors

You want to get a feel for the neighborhood? Talk to the neighbors. Just by walking around the neighborhood, you’ll get a vibe to let you know if it’s right for you. Are the people a little standoffish? Are they hesitant to make eye contact with you?

Are people friendly and neighborly? Maybe a little too friendly and neighborly…? Take a walk around and strike up a conversation with your potential future neighbors to get a good feel for the community.

#5: Go Out to Eat at a Local Hot Spot

While you’re checking out houses, go to a popular eatery in the neighborhood. Check out the vibe and take note of people’s moods. Do they look at you suspiciously? Is the customer service lousy? Is it great and are the people great? You can glean a lot about a neighborhood by simply people-watching at a diner.

#6: Attend a Local Festival or Event

Kill several birds with one stone by attending a local event or festival. You’ll meet people in the neighborhood and get a sense of the type of community that it is; is it tight-knit? Young? Too old? A little too country? Local events can tell you a lot about the spirit of the neighborhood.

#7: See a Play or a Game at a Local School

If you have kids, the quality of the local schools in your neighborhood may be priority No. 1. Before you buy a house and enroll the kids, visit the school. Go to a school play or watch one of the local school’s sports teams to get a feel for the level of community support for the school and athletics.