Many, often, articulate some of the essentials of financial planning, but do so, without really paying attention to what it should include and mean! There are many necessities, including the need to include all possible components, which could improve a person’s ability to be as successful as possible from a financial standpoint. However, many only look at this, in terms of stocks, bonds, and other investments, without fully considering where real estate fits into the bigger picture. It takes intelligent financial planning, both from a global and specific perspective, to determine, how to create, the right balance and direction for each of us. There is no one-size-fits-all approach, but rather, this article will attempt to consider, examine, examine, and discuss the reasons why, in most cases, real estate should be, a vital part. of his personal financial plan.
1. Start the process: One should begin, this process, by giving oneself, control, neck – up, and determining what their personal and financial goals are, and why. Real estate should be divided into two categories: personal accommodation; and invest. For most people, the value of their home is their only one – the biggest investment, along with housing and owning a piece of the American Dream! In many cases, historically, investing in real estate has been a good decision, because not only does the property itself help keep up with inflation, but there are tax benefits ( including depreciation, etc.), and, when done, correctly, a positive cash flow. Before this can be done, effectively and efficiently, it is important to be prepared, for financial necessities. These include: funds for down payment and closing costs; financial reserves for repairs, renovations, maintenance and upgrades; and; a contingency reserve. When investing, consider cash flow, rates of return, and both opportunities and ramifications.
2. Do you want to be an owner? : Are you ready, willing and able to be a homeowner, with the responsibilities, stress, tensions, hassles, and potential tensions that come with it?
3. Balanced portfolios: Savvy investors seek to diversify, and in so doing, means, correctly, to balance, investments in stocks, bonds, savings, real estate, etc. Real estate traditionally grows in value at, or slightly, more than the rate of inflation, while bonds, often not, and stocks are often selective and difficult to balance and choose properly and efficiently. .
4. Personal home: How important is it for you to realize part of the American dream by owning a home, yours? It makes sense to weigh up whether you should buy or rent, where to do it, the pros and cons, and ways to financially prepare for, and profit from, the unexpected!
5. Invest in real estate: Some people use real estate investment trusts, or REITs, to participate in real estate investments. They hope to profit from professionally managed portfolios, but must recognize that some are more conservative and income oriented, while others may be less secure and more speculative! Others start their engagement by buying a two-family home, and it’s wise to weigh the costs against the potential and the risks.
Smart investors balance their portfolios and therefore their risk / exposure. Are you ready to engage, to proceed, wisely and with your, eyes wide open?