By Patrick O’Brien, Kiser Group
I’m sure you’ve heard the phrase, “don’t have all your eggs in one basket”. Having a diversified portfolio is not just owning stocks and bonds. Long-term real estate investing is the best third leg of the investing stool. Short of another crisis, real estate values are more stable than the stock market. How do you know if an investment property is right for you?
You’re Looking For Passive Income
Aside from the initial investment and upkeep costs, you can earn money while putting most of your time and energy into your other pursuits. You’ll need to find the right property management, but that will be factored into your overall expenses.
You’re Looking For Tax Saving Opportunities
You can put real estate into a self-directed IRA. Rental income isn’t included as part of your income subject to Social Security tax. The interest you pay on an investment property loan is tax-deductible.
You Have Access To Capital
The single greatest barrier to entry in real estate investing is capital. If you can come up with 10 – 20% of the purchase price of an asset, you can get started. While apartment investments typically produce more ROI, more people invest in single-family rentals because of the lower cost of entry.
The first deal is always the hardest. Like any investment, keep your expectations realistic. Rental property isn’t going to produce a large monthly paycheck for a while and picking the wrong property could be a catastrophic mistake. Consider working with an experienced partner on your first property or rent out your own home to test your landlord abilities. If you are looking to buy your first multifamily property in Chicago, don’t hesitate to reach out. Kiser Group always has an appealing inventory for new investors.