At one point or another, investors will often move some or all of their profits from stocks over to real estate. In our latest post, we will offer tips for investors who want to transition their cash into real estate in Chicago and beyond.
Real estate is a popular investment no matter what generation you are from. People of all ages and income brackets know that some of the best returns, with the lowest risk, are found in real estate. If you don’t have real estate in your portfolio, now is a great time to start!
Why Real Estate Pays Off
There are many excellent benefits to real estate investment that the stock market can’t compete with. The tax benefits alone can be enough for many investors to decide to focus more on real estate. People also like that real estate is tangible. They personally have the ability to increase the properties value, whereas the stock market is left up to the actions of others.
Knowing When To Sell
Knowing when it’s the right time to sell off your stocks is a challenge. People study the data, read the forecasts and try to find the perfect time. However, the stock market can be volatile. If you are at a place where selling makes sense, it might be smart to pull your money and get it invested into the perfect piece of real estate. Of course, you should consult with your attorney, accountant, financial planner or all of the above before doing so.
What Type Of Real Estate Is Best?
There is no “right” or “wrong” type of real estate. What is right for one investor, may not be right for another. The best type of real estate all depends on the investor. Ask yourself… how hands on do you want to be? How much can you honestly afford? There are benefits to both single-family and multi-family properties. It all depends on how much you can invest and how much responsibility you are ready to take on. Keep an open mind and take into consideration any potential deals that come your way. You might be surprised at the potential found in different types of property.
Crowdfunding & REIT’s
If you want to get started in real estate investment, but are looking for a less hands-on approach, consider buying property through crowdfunding or a REIT. Both allow you to pool your money with other investors to purchase larger investments that may have been unavailable to you on your own. The management is typically handled by others, so you can invest, then kick back and relax while waiting for your dividends.
Form A Team
No great investor does it alone. Even if they don’t have a financial partner, they have a team of professionals working with them to help them achieve their goals. Your team might consist of a wholesaler, an agent, a professional home seller, a top-notch title professional, a lawyer, an accountant, a decorator and more. Having strong relationships with these industry professionals is invaluable.
While you might choose to move some of your cash from stocks to real estate, don’t fail to diversify. Every investor approaches things differently. Don’t be hasty and close all of your accounts in order to buy real estate. Instead, slowly take your returns and reinvest in other areas. Murphy’s Law states that if you close all of your brokerage accounts the next day, the market will go through the roof! While you might focus on specific types of investments, diversification is always the key to investment success.