Solano Real Estate Scene: How to invest in real estate
As you may have heard me say in the past, your owner-occupied home shouldn’t be considered an investment unless you collect a bunch of rents from your kids or roommates.
In 30 years, when the value has doubled or tripled, the only way your home could pay off as an investment is if you sold it and took your tax-free capital gain and moved to a home for much less in value. Arkansas, Nevada, Texas or maybe Florida could allow you to buy something for cash and pocket the capital gain. These are great places to live for four or five months per year when the weather is comfortable.
Investing in real estate is easier than ever in America.
A blue-collar, middle-class homeowner family can become a landlord overnight by moving into a new house with only 5 percent down and convert their old house into a rental property. A homeowner can refinance their home or get a home equity line of credit and borrow enough money for a down payment on a rental property or a vacation home that can be rented on Airbnb or through a property management firm.
You can invest monthly in a real estate investment trust, or REIT, with as little as $50 per month. You can invest in commercial buildings through these new entities like Rich Uncles, which my son has been doing the past couple of years.
If you’re lucky to have financially strong parents or grandparents, you can buy a home from them when they decide to sell and move down to a smaller one-story home and the lucky part is that you can buy the home with nothing down if they can afford to gift you some equity.
You can invest in real estate like the banks do, by lending money on real estate through private money loans as well as publicly traded or privately held mortgage REITs.
Owning income-producing assets like dividend paying stocks and income-producing real estate is critical when you retire and lose your income from working your butt off to live.