Find Out the Best Real Estate Investment to Help Build Your Wealth
Are you a Millennial or even elder Gen Zer who has been thinking about investing in real estate? The obvious answer to that question is, duh, yes. So maybe the bigger question you should be asking yourself is, what is the BEST real estate investment for me?
Maybe your mind is taking the route of searching out the best real estate investment between a starter home, a flip, a duplex, new build or even building your own home. But we’re actually asking you to consider these options:
- Do I invest in my own home to reside in?
OR - Do I invest in a property meant to generate income?
There are many factors to consider in choosing the right answer for you:
- Stage of life
- Savings
- Economy
- Expendable income
Let’s break each one of these down.
Image by Nattanan Kanchanaprat from Pixabay
Stage of Life
If your family is growing, and you need space that you’re not paying an arm and a leg for in rent, maybe it’s time to become your own landlord, er, a homeowner.
We don’t knock this reasoning. It’s a really important one, and one that excites us, as realtors. Helping first-time home buyers and still one of our favorite things to do at Dani Beyer Real Estate. It’s a big deal. It’s a fulfilling part of that American Dream. (Insert shameless plug for our episodes of American Dream TV: Selling Kansas City.)
Bottom line, although you may not be generating extra income by choosing this route, investing in your own home is still a solid financial decision. You’ll start building equity instead of just throwing away hundreds or thousands of dollars each month in rent. You’re still building your wealth through real estate.
Savings
If you’re considering the option of solely investing in a rental property, what sort of savings or capital are you working with? Though you may have enough money for a downpayment on an investment property, make sure you consider some cushion to fall back on. This consideration is needed for multiple reasons:
- You may need to do renovations and won’t start earning rent payments immediately.
- It may take time to find the right renter, and again, you’ll be covering the mortgage payments on your own.
- Repairs, and sometimes, yard work are still your responsibility as the homeowner. Though the rental income should pay for these things, it’s still good to have some savings should any other unexpected expenses pop up.
Economy
There is talk of another recession happening to our country soon. CEO of Mynd, Doug Brien tells us, “As [those] recession fears mount, single-family rental investments could grow into an even more attractive asset class. As inflation rises, rents are bound to rise, which increases potential cashflow for property owners.”
However, in order to make the best real estate investment decision for yourself, you have to decide how much of a risk taker you are, or how you do with an uncertain economy or even real estate market.
Expendable Income
Maybe you’re in a place financially to do both! Perhaps you already own your own home and you’ve been considering branching out to investment properties, do it! If you don’t want to be a hands-on landlord, there are plenty of reputable property managers that can do that for you. (If you’re in the Kansas City area, check out preferred vendor, Classic Property Management.)
Our team also has a special portal for real estate investors if you’re taking consideration into it becoming a large focus for your real estate goals.
Mynd’s 2022 Consumer Insights Report tells us that “Forty-three percent of people younger than 40 say they are considering becoming ‘rentvestors,’ who continue to rent their own home while shoring up income from an investment property.” So it sounds like many of you are seriously considering the 2nd option, and there’s nothing we’d love more than to help your first home purchase be one to help you gain more income!
At Dani Beyer Real Estate, we know the Kansas City Metro (We’re licensed in MO and KS!) like the back of our hands and can help you decide where the best location is for your first And the best real estate investment.