Should You Invest in Real Estate with your Retirement Savings?
By Peter Rizzo
Most of our clients know that I am an advocate of investing in real estate, for even if the market crashes, you still have something that produces income or that can recoup its valuation. Some people get into real estate investing without the proper knowledge or mindset. They may become a landlord without knowing all the work that goes into it or they may lend money and then hold their breath until the 1st of every month hoping to get paid.
Here are a few tips that might help you in your quest for stability and appreciation in your retirement accounts using Real Estate:
- Become a student of the location you are investing in. This becomes extremely important when buying rental property, as some areas may have unique circumstances or different rules that an investor will want to be aware of. For example, some communities have recently put a moratorium on evictions during the Covid–19 crisis. This is also true for cities in Northern climates when the temperatures go below freezing. In other words, know the rental laws in your area.
- Partner with a Pro – There are many realtors and flippers that will welcome a financial partner as it helps them increase their portfolio without extra investment. If you’ve never flipped a house, going on your own can be costly. I have partnered with a number of home flippers, and even though I gave up some profit, the headaches were less and money was saved because of their connections and knowledge.
- Assemble a good team. Having a good Realtor, Inspector, Banker, Title Closer, and Handyman (person) could save you time and money, and, could possibly open up investment opportunities you might not otherwise be exposed to.
- If you lend money, stay in your lane and don’t break rules you set for yourself. Many of our clients are successful lenders and the thing they all state is:
- Only lend when the situation makes you comfortable.
- Have a plan for what and to whom you will lend money to.
- Have a detailed collection policy.
- Don’t be afraid to use a property manager. When getting started, it takes a lot of heat off the investor as they establish a pattern for collections, repairs and leasing times.
- Don’t be afraid to use an investment company to purchase your properties.
They do everything from acquisition, financing and management. This way you enter the world of Real Estate without any time investment.