It's A Good Time To Buy Real Estate Investments When...
...You have a high-value rental property with a low-value rental income. You can do a 1031 Exchange and buy properties that give you a higher rate of return. What's better: a $750,000 home renting for $3,000/month or 3 $250,000 homes, each renting out for $1,800/month?
...You determine that steady rental income is better than the dividends you've been getting from your 201k (formerly known as 401k). Sure, maybe there are a handful of people out there with flourishing stock portfolios, but there are many, many more who have seen their values drop significantly in the recent years.
...You have a lot more than an 8-month emergency fund sitting in your savings account earning you less than 1% interest. Everyone should have at least 8 months worth of monthly expenses, to be used in case of emergency. However, any "extra money" should be used to make the most of your financial future...which needs to earn you a lot more than 1% interest!
...You and your partner/spouse are on the same page when it comes to investing in real estate. Some couples can't seem to agree on whether or not they should invest in real estate because they may have very different risk levels. It should be something you decide on together, not a reason to place future blame on the person for either investing or not investing.
...You are familiar with the things that can go wrong with owning rental property and being a landlord. Remember that movie Pacific Heights with Michael Keaton that took place in San Francisco? Sure, it's a movie...but you get my drift. Being familiar with all of the rental laws and ordinances will help keep you out of trouble. :)
...You have a team of professionals guiding you to make the best decisions when it comes to real estate investments. This not only means having a real estate brokerage that specializes in investment property (like Souza Realty for properties in Roseville, Rocklin, Lincoln, Loomis and Granite Bay, CA - zip codes 95648 95661 95747 95677 95765 95648 95650 95746), but having a property manager, real estate attorney, CPA, insurance agent and a team of contractors and repairmen is also beneficial.
BOB & LEILANI SOUZA
Real Estate Investment Specialists
Southwest Placer County, CA
Bob Souza - 925.513.3400 - bob@souzarealty.com
Leilani Souza - 916.408.5500 - leilani@souzarealty.com
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Leilani, this is GREAT advice, and will re-blog in a few days! I did not think of clients with rental properties not performing properly!
Leilani,
Great list to support a thoughtful approach to home buying in today's market.
Steve
Very important list Leilani, some points that I am working over right now. Thanks.
Leilani, this is great information! I especially liked the point you made with the 1031 about trading one high priced underperforming property for three properties that would almost DOUBLE the income!
It's tough to get those people to move out of their 101K's as they want to hold on and get their money back when the market rebounds.
Joan, I appreciate you wanting to re-blog this post! Some people just let their real estate portfolio sit on a shelf and get dusty over the years, but one benefit of working with us is that we give our clients advice after taking a look at their entire real estate portfolio. So far, they can all do better buying properties we recommend than keeping what they currently have. :)
Leilani
Thanks, Steve! :)
Leilani
Glad this list helps you, Tom! :)
Leilani
Thanks, Bruce! Exchanging 1 rental property like that for 3 is a great way to give yourself a HUGE raise in your monthly income, doesn't it? :)
101k...LOL!
Leilani
Leilani - Great list of reasons why now might be the right time to buy an investment property.
Thank you, Michelle! :)
Leilani