Is Real Estate Actually a Good Investment?
Real estate can be a great investment, but if you don’t fully understand your numbers, it can be a disaster.
A couple that I met with recently, loved getting their monthly rental checks and keeping close tabs on the fluctuations of the housing market.
When the market started to rise, they began to sell off their rental properties, not thinking about the tax implications. The IRS greeted them with a tax bill for the depreciation they had taken over the last several years.
Their actual return ended up much smaller than they originally anticipated.
This is why having a financial plan is so important.
In order to reach your goals, you need to fully understand your numbers and the actual impact and risks.
If you don’t want to get burned by a short-sighted investment decision, here are 3 things you should do:
- First, think logically. We all know how emotions can cloud judgment, so be careful with your investments. Look at the big picture to determine what is best for you and your family.
- Secondly, know your numbers. Especially with real estate. In order for real estate to be a good investment, you need to understand tax implications and the actual returns your properties are producing.
- And lastly, work with professionals. Don’t rely on your own expertise when investing in your future. Talk to a fiduciary financial advisor to get a second opinion and advice on big financial decisions.
My goal is to help all my clients nurture and grow their nest eggs thoughtfully, and with the big picture in mind.
Visit my website and schedule a short phone call with me.
I would love to join you on your financial journey.