Have you ever though about how much you need to retire from work? Real Estate could make sense for a great retirement vehicle. Lets look at what you can do. If you can purchase a home at a low price and pay it off in 10 to 15 years or if you purchase the home cash. In our area, each home will bring in (assuming you purchase a low end home) $1800-2500 per month.
If you own 5 homes it will bring in $9000-12,500 per month. Now that is better than Social Security. There are a few thing you need to do. Have good credit if you are going to purchase a home with a loan. I would still carry 30 year financing but pay it off like a 10 or 15 year loan (calculate the payments you would make on a 10 or a 15 year loan and pay that). The reason for taking the longer term rather than the short term is if life delivers you a curve ball you did not see coming you can pay the lower 30 year payment. If you have a 10 or 15 year loan and some problem in life creates a financial hardship, the bank will now allow you to pay a lower payment. Usually, if a financial hardship does happen you cannot refinance either. So plan ahead.
Southern California does not have enough property to handle the influx of people that are going to need housing. Therefore, in the long term one can easily have a home to rent to those who need housing. I suggest single family homes, but duplexes to fourplexes are fine. I favor single family homes because they increase faster in an up market and if you need to sell one of your properties a single family home has a larger population of buyers. The positive for an investor with a multi-unit property is spreading the risk of vacancy. A vacancy will only be part of the income on the unit that is not coming in.
If you choose wisely in a market like we have now you can set yourself up for life. For more information contact me at www.markandtim.com Real Estate can be a great retirement vehicle.
Comments(1)