If you’re looking for a smart way to build your wealth, you’ve probably already thought about investing. If you have a portion of your assets or your IRA already invested in the stock market, congrats. That’s a great way to start accruing wealth and building a “nest egg” or early retirement fund.
However, another savvy way to build your wealth is by diversifying your investment portfolio. Instead of putting all your eggs in the stock market, consider a wide variety of different investments. One reliable investment opportunity is in real estate.
Investing in real estate, specifically rental properties, is a dynamic way to bring in cash flow. Compared to stocks, rental properties tend to bring in more money and increase over time without chipping away at your initial investment.
Interested in beginning your investment journey? Here are 3 classic real estate investment opportunities in Lake Norman.
When you think of a typical real estate investment, you may be picturing the “buy and rent it out” model. This involves purchasing a home, duplex, or apartment building and finding tenants to rent it out to.
Traditional rentals are a great first investment because they can yield large cash flows. You’ll have a mortgage out on the home, but it’s paid off every month by your tenants’ rent payments. After your mortgage payment and insurance are paid off, the rest is pure income.
It’s important to be prepared, though, and take into account all the expenses you may have to pay to keep your rental home up-to-date. As a rule of thumb, your monthly return on an investment property should be 1% of what it’s worth. So, if you own a $100,000 property that you rent out, you should be getting $1,000 every month to make it worth it.
“House flipping” is becoming very popular. You may have seen popular HGTV shows like “Flip or Flop,” which detail this growing practice. It involves purchasing a run-down or foreclosed property, often sold as-is, and then “flipping it” by doing repairs and upgrades to increase it’s value.
After it’s been properly “flipped” you can sell for a profit. Though financially lucrative if you know what you’re doing, there are a lot of things to consider when “flipping” a house. You have to pick your property very carefully. It should have good bones, a strong foundation, and a sturdy roof, otherwise you risk biting off more than you can chew.
To further diversify your investment portfolio, consider purchasing a commercial property to rent out to local businesses. This is another great investment option because you can do a joint-investment with other trusted investors in your area.
Commercial investments also tend to bring in greater cash flow than traditional rentals, and feature a decreased risk for investment loss.
Find Your Ideal Investment in Lake Norman
When it comes to investing in Lake Norman, I have your back. I’ll leverage my real estate expertise to find you the investment that’s right for you. My goal is to equip you with everything you need to make a wise decision in real estate.
To begin building your wealth and diversifying your investment portfolio, please give me a call at (704) 902-6755