With today’s real estate environment making it very difficult to sell a home many homeowners are considering the option of renting out their property and holding it as an investment. Just the same as investing in the stock market or other financial instruments real estate can be a very strong investment to keep in your portfolio.
When facing a decision of selling a home now, for 30k less than was paid for it or renting the home to offset monthly mortgage payments, taxes, and repairs/maintenance one should really consider the possibility of investing in their home. Imagine a scenario, 10 years down the road, in which you have paid down 20% of your mortgage, your homes value has increased by 30% and the monthly rental rate produces a positive cash flow of $500 per month. Could that help out with your retirement? Help pay for your children’s college?
Too many times we see homeowners wanting to walk away by selling their homes at a deep discount or even short selling or losing their home to foreclosure. Why isnt anyone interested in holding property as an investment? Real estate is one of the few investment instruments that is an actual tangible asset with real value and utility. Real Estate offers an investment that one can see and touch.
With everything, their is a cycle, “ups” and “downs”. Currently we are in a down part of this cycle which makes it a horrible time to sell but a great time buy. Holding assets for the “up” cycle is a wise move and with rental income this is possible. Would an investor sell a stock of a company that he/she believes in, one day after the stock market took the biggest dive in history? So why sell a home in a similar scenario? Better than a stock, real estate has rental potential and using that rental potential to survive the storm can be a very profitable investment decision.