In the past several years, many Americans have lost much of their wealth. This is especially true for those who invested in stocks, bonds and funds. Some of this wealth disappeared because of a downturn in the economy, ill-advised investment bets and just plain fraud. Boomers, particularly, are feeling the pinch as they near the end of their earning and saving years.
Now there are two options: downsize goals, live and retire more modestly, or use the tools available to restore lost value and leverage to rebuild the portfolio as fast as possible. Real estate investor associations can be a place for concerned baby boomers to find real help, right now. Wise investors have always known that well-bought and well-financed real estate investments can grow faster, and more securely, than any other type of asset – period.
Now, the potential of real estate, combined with the current market (the best time in a generation to buy residential real estate) has created an even greater reason to investigate how to get involved in real estate investment. Opportunities exist for the wise investor in wholesale, retail and buy-and-hold transactions.
Buying residential real estate is about the fundamentals of the deal. If you buy it, finance it and rent it, will it provide a return after all the monthly expenses and mortgage payments are met?
Today there are hundreds, if not thousands, of rental home candidates in attractive neighborhoods in cities that offer the investor positive cash flow. Because of attractive capital acquisition costs and favorable financing, many of these deals generate positive cash flow and meet the definition of a wise investment without considering home-value appreciation and tax benefits. The tax benefits and appreciation become bonuses working for the investor, subject to personal tax situations and future appreciation rates.
Consider this: Residential real estate as an investment asset, if done right, is a solid investment. The perception that flipping houses is like trading stock was based on erroneous assumptions and investment fashion, far from the reality of steady real estate returns. The exception to this statement is the professional real estate wholesaler or efficient investor who can buy at wholesale and deep discounts, renovate, and sell at a higher price in an economically reasonable time, sometimes called a “fix and flip.”
JC Underwood is the executive director at the Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. He can be contacted at jcu@MetrolinaREIA.org For more information, visit www.MetrolinaREIA.org.