Since I can remember, I have always thought Real Estate was a great investment. I remember as a little kid, maybe 11 or 12, thinking why doesn't everyone buy as many houses as they can. Of course, as I got older, my vision became tempered with the constraints of investment and homebuying, but I never changed my opinion on Real Estate as the best investment since sliced bread.
If you are in the Real Estate business, you are best positioned to understand the value of a reasonable real estate investment, the numbers involved, and as a Realtor, it is to your benefit to learn understand the laws of tenancy, landlord rights, property management issues and investment analysis anyway so as to better understand your business and service your clients.
You also, as a Realtor, want to make sure that you provide for your future. The day will come that you will retire, and it would be nice to have equity put aside that will help you enjoy your life when that time comes. Many Realtors, I have found, are not that good at systematically saving in an IRA or something of that nature, given the unpredictability sometimes of the commisssion cash flow.
So, as a Realtor, it is incumbent upon you to buy property for your own portfolio as well. It doesn't have to be a lot, a big piece, an apartment complex or a warehouse. It can be a simple as a small one family that needs some paint or a small condo. Buy something. Start somewhere. Develop a small stake, or take a chance on leveraging a purchase with 100% financing if it is available in a respa compliant and statutorily compliant and disclosed fashion in your market. But do something. Rent it, deal with it, run it like a small hobby or side business, don't let it eat your time, and try to make sure it at least breaks even, or almost breaks even on the rent to expenses. You'll get a nice tax write-off to offset your (hopefully robust) 1099, you'll build up equity on the mortgage paydown, and in the long run, you will inevitably create a much greater equity in appreciation. If it shows positive cash flow you're even more ahead of the game. The appreciation will happen by itself without you having to make it appreciate, just keep the building in shape and be responsible. Other than that, all you have to do is list and sell houses while making a few extra deposits, writing a few extra checks and taking an extra 6-12 phone calls a year and you'll build substantial equity for the long term, better than any systematic savings plan I've ever seen.
It doesnt have to be a steal, or even a great deal. Anyone who bought property at market value, even if the closed on Black Monday October 19, 1987 when the Real Estate market in the northeast began its 30% depreciation in value nosedive through 1990, have houses now worth more than triple what they closed on that day, if they still own them.
Comments(5)