They say, Home is where the heart is. We say, home is where the money is.
Investing in the stock market is the classic way to invest. You buy a stock, then wait for it to make you money. You don't have to get your hands dirty. But going classic is not always the best way to go, especially when you have the potential to make even more by trying another investment strategy.
Two words: Real Estate. We know what you're thinking. Maybe you won't be like the cast of Million Dollar Listing, who scours Los Angeles for the most dazzling homes and receives commissions that could buy several bungalows in the Galapagos. But you could use real estate to your advantage with a little research and a little heavy-lifting. It may just be worth it in the end.
So you want to become a landlord? If you decide to go on this path, you'll have to buy the property, pay the mortgage, and the tax and maintenance costs. You'll be responsible for renting out rooms to tenants and vetting them so they won't drive you crazy knocking on your door at 3am. But after all is said and done, you get the mortgage out of the way, and break even, you'll get the chance to raise your rent and collect positive cash flow.
What's that you said about cash flow? Not just positive, but it could actually be tax-free, depending on if you're classified as an active investor, a real estate professional, and of course, depending on your income. To find out more on if you're qualified, check this out.
The other thing about investing in property is that it forces you to make a commitment. Afraid of the C-word? Here's why you shouldn't be. According to an article on Entrepreneur.com, "Rental real estate is a forced retirement plan. Americans are terrible savers. We lack the self-discipline to put a monthly deposit into our IRA, SEP or 401k as small-business owners. However, buying a rental property is a significant commitment that you are required to commit to and maintain. You will always be grateful in the long-run when you don't give up on it and build future cash flow and wealth."
If you're not interested in being a landlord, consider an REIT. It stands for Real Estate Investment Trust, and it means you can invest in a portfolio of properties by purchasing stock. You'll get paid dividends which will act as consistent income. For more on the different types of REITs, and to see what's right for you, click here.
The real estate market may also be a more stable option than the stock market, depending on the season. Investopedia cites the example of the "Flash Crash" of May 2010 as a moment when the stock market was highly volatile, therefore lauding the "more stable pricing" of real estate.
Investor Peter Koulizos agrees:
"When you factor in the return and risk associated with buying property and shares, property wins hands down, shares have [marginally] higher capital growth, but the difference in risk is huge. The risk is measured in variation in returns and capital growth (or loss) on shares can range from +40% in a year to -40% in a week! You don't get that sort of variation in property, hence it is considered a safer investment."
Investing in property is a great option that can lead to impressive profit. Anyone can throw money at the stock market, but some of us should go back to the nest.
Here's how to get started.
- 5 Tips For Financing Investment Property | Bankrate.com ›
- Property Investment Company, Cleveland, Ohio - providing one and ... ›
- 10 lethal mistakes for real estate investors | Bankrate.com ›
- Should I Buy an Investment Property? | MONEY ›
- Three Things That Make A Great Real Estate Investment - Forbes ›
Airbnb offers an affordable option for people looking to be more comfortable as they travel.
However, there are downsides to staying in a host's home rather than a hotel. Whereas hotels are designed for constant streams of visitors and often have furniture built to last, at an Airbnb, you may be staying on old or cheap furniture that a host is using in order to maximize their profits.
And while most reputable hotels will have regular room inspections from staff to check for any wear and tear, Airbnb damage disputes are oftentimes he said, she said situations. If you are in an Airbnb and something breaks, there are a few steps you should take in order to ensure that you are not on the hook for damages out of your control.
If you're keeping tabs on the art and tech worlds, you've probably been hearing whispers about "NFTs" for the past month. Just over the past week they've entered the mainstream lexicon.
Twitter founder Jack Dorsey made the news for selling his first ever tweet. The app has been teasing paid subscription models and newsletter-like features, but tweets for sale is "the next frontier."
just setting up my twttr— jack (@jack)1142974214.0
The 2006 tweet went up for auction as an NFT, and the current bid is $2.5 Million. But what does it mean to own that? Why would anyone want to? And what even is an NFT?
Long gone are the days when the majority of Americans dreamed about owning a home with a white picket fence.
The traditional American Dream may be on its deathbed, but that doesn't mean a core component of the vision can't survive. It simply takes a diverse perspective. People can still believe they can attain their own vision of success in society with hard work, knowledge, and risk-taking. Investing in today's American Dream may literally mean investing money in our modern economy, starting with our infrastructure.
Real estate investing in particular is a lucrative method that can boost income and secure a better financial future for many. There's always risk involved, but the payoffs can far outweigh the uncertainty. Selecting solid financial investments is about confidence and competence. If you're looking for some advice on this kind of investment, here are a few savvy tips for new real estate investors.
Stick To a Specific Strategy or Niche
Real estate is a challenging sphere of the business world, one that requires several key skills: groundwork knowledge, networking, perseverance, and organization. True knowledge of the real estate market will come with time and experience, but it's a smart idea to select one area of the market and stick to it. This is the best way to attain in-depth familiarity with your specific niche.
First, choose a geographical area close by and then a niche strategy within it, such as house flips, rental rehabs, or residential or commercial properties. By doing so, you can become aware of current inner working conditions in the market and you'll have a better idea of how these trends may change in the future.
Be Vigilant About Viable Financing Options
While it takes money to make money, you don't have to use all your own money. A common misconception about real estate investing is that you must be wealthy to start off. This isn't straight fact, however. A majority of people can test the waters of real estate investing without a lot of initial cash in their pocket.
Aside from traditional financing options from banks and institutions, private lending options can be worthy solutions. Hard money lenders are popular, reasonable choices, and they tend to have fewer qualification requirements upfront. However, be sure to strategically choose a hard money lender to find the best possible fit.
Master the Art of Finding Good Deals
There may be hundreds of thousands of available properties for sale on the current market, but the bulk of them will never amount to the final money-making result you desire. Another great tip for new real estate investors is to use good math to estimate profit. Taking risks is part of the process, but you have the ability to analyze properties and use networking sources to find the greatest deal. You can't win every deal, but you can steadily work towards a thriving financial future.