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Real Estate is an Investment
There is always land. Real Estate has been perceived as a safer choice in investing. For those of us who have been burned on the Stock Market, we may be very eager to wrap ourselves in Real Estate. As a Realtor and a professional Real Estate Agent--and as an investor and home owner--I have many reasons to support and sing the praises of Real Estate. The reality is, however, that Real Estate is an investment, and we serve ourselves best if we keep that in mind and treat it that way.
Real Estate: Presumption or Plan?
What moves our decision to rent or buy, if we have the option? Return on investment. Sometimes, the numbers dictate that a short-term rental is better than a short-term purchase. In one of my Real Estate articles I wrote about the fact that there comes a time to sell a rental property when the return on investment would be better elsewhere. Our choices become more difficult when we give them full consideration this way, but a difficult choice is better than a wrong choice.
Real Estate: Is Debt-Free Always Best?
For example, I remember very clearly an associate of mine (from my pre-Realtor days) emphatically stating that no home owner with a mortgage should have any major savings or investing plan beyond paying down that mortgage. That's where every dollar had to go. I thought it made sense, at the time. Who wouldn't want to have their home debt free? Again, the reality is not that simple. What is the interest rate on the principle you're trying to pay down? Can you earn a better rate by investing elsewhere? If you secured a low interest mortgage, then as rates go up, you may find yourself in a position where fairly secure investments outstrip the savings of paying down your mortgage. Is it really better to save 5% when you could be earning 7%, 9%, or more? What if taking on more Real Estate debt, in the form of a rental property, could produce a positive cash flow that could be used to pay part of your current mortgage payment?
Real Estate and Realtors
Real Estate decisions take thought and consideration. As your Realtor, I do all I can to help, but the right choice is always a personal choice. That's why I provide so many Real Estate tools on this site. They are designed to help you make your own best choices and discover again why so many people turn to Real Estate for their investment needs.
Wade Ogletree, 2006