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Top 10 Reasons Boomers Were Right About Homeownership: Is It Too Late for Millennials?

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Boomer Homeownership Intro
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Homeownership has always been a cornerstone of the American Dream, a sentiment strongly embraced by the Baby Boomer generation. As Millennials now navigate the complexities of the housing market, the wisdom of their predecessors comes into sharp focus. This article explores the top ten reasons why Boomers were right about the value of owning a home and examines whether it’s too late for Millennials to follow suit.

1. Long-term Financial Security

Long-term Financial Security
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Boomers understood that homeownership is more than just a place to live; it’s a long-term investment. Property typically appreciates over time, offering a reliable source of equity growth. For Boomers, this was a key step in building financial security.

Millennials, facing a fluctuating job market and student debt, might find this path more challenging. However, with strategic planning and smart financing options, homeownership can still be a viable way to secure their financial future.

2. Stability and Community Ties

Community Ties
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Owning a home provides a sense of stability and roots in a community, something Boomers valued highly. This stability often translates into stronger community ties and a sense of belonging.

For Millennials, who are often seen as the ‘nomadic’ generation, laying down roots can provide unexpected benefits, including enhanced mental well-being and a sense of belonging.

3. Forced Savings Mechanism

Forced Savings
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Mortgage payments act as a form of ‘forced savings,’ ensuring that money is being put toward building equity. Boomers capitalized on this, viewing each payment as a step towards financial growth.

Millennials can adopt this approach too. While the upfront costs are significant, the long-term payoff of building equity can outweigh the burdens of rent payments that offer no return.

4. Tax Advantages

Tax Advantages
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Homeownership offers several tax benefits, a fact well-known to Boomers. Deductions on mortgage interest and property taxes can lead to significant savings.

For Millennials, these tax incentives remain a compelling reason to consider buying a home, despite the upfront costs and the current economic landscape.

5. Freedom to Personalize

Freedom to Personalize
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Boomers cherished the freedom to personalize their homes, an option that renters simply don’t have. From painting walls to major renovations, owning a home means having control over one’s living space.

Millennials, known for valuing personal expression, can find homeownership particularly rewarding. It allows them the creative freedom to make a space uniquely theirs.

6. No Landlord Restrictions

No Landlord Restrictions

Boomers enjoyed the absence of landlord restrictions, which can be a significant advantage of owning a home. They didn’t have to worry about lease terms or rental increases.

For Millennials, escaping the unpredictability of renting can be a strong motivator for homeownership, providing a sense of control and permanence.

7. Building a Legacy

Building a Legacy
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Boomers saw homeownership as a way to build a legacy, something tangible to pass down to future generations. It’s about creating a lasting family footprint.

While Millennials might not be as focused on legacy, the idea of owning a home that can be passed down or be a part of their family’s history is still appealing.

8. Inflation Protection

Inflation Protection
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Real estate often acts as a hedge against inflation. Boomers witnessed the value of this as property values and rents tend to rise with inflation, while mortgage payments remain stable.

For Millennials, investing in a home can protect them against the eroding effects of inflation, especially in a volatile economic environment.

9. Sense of Accomplishment

Sense of Accomplishment
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Owning a home was a significant milestone for Boomers, symbolizing success and achievement. It’s a physical manifestation of hard work and dedication.

For the Millennial generation, this sense of accomplishment still holds true. Buying a home, despite the hurdles, can be a powerful statement of personal and financial achievement.

10. Retirement Security

Retirement Security
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Finally, Boomers viewed their homes as a key part of their retirement plan. Either by downsizing and cashing in on equity or by having a paid-off property to reduce living expenses in retirement.

Millennials, grappling with uncertain retirement prospects, might see homeownership as a strategic move to ensure a more secure retirement.

Challenges Facing Millennials

Challenges Facing Millennials

 

While the challenges facing Millennials in achieving homeownership are real and significant, the fundamental reasons that made it a wise choice for Boomers remain valid. With careful planning, patience, and perseverance, Millennials too can reap the benefits of owning their own home. It’s never too late to invest in your future.

Thinking of buying a home but unsure where to start? Dive deeper into the world of real estate and discover how you can make the dream of homeownership a reality.

How To Get Into Real Estate Investing As A Beginner

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Investing in real estate has long been a potent strategy for accumulating wealth, utilized by individuals throughout history. While it may appear overwhelming for novices, acquiring the appropriate knowledge and tactics allows anyone to embark on a successful real estate investment journey. This beginner’s guide will cover the fundamental steps and aspects for those intending to invest in their inaugural property.

Establish Your Investment Objectives

Before venturing into the realm of real estate investment, it is essential to establish your investment goals. What are your aspirations for your investments? Do you desire rental income, long-term asset growth, or a combination of the two? Comprehending your goals will aid you in making well-informed choices during this journey.

Assess Your Financial Situation

Real estate investments require capital, so it’s essential to assess your financial situation and establish a realistic budget. Determine how much you can comfortably invest without stretching your finances too thin. Consider factors like your current income, savings, and credit score, as these will influence your ability to secure financing for your investment.

Educate Yourself

Diving into the realm of real estate investment requires a period of learning and growth. Allocate time to familiarize yourself with various investment options like Residential properties in North Cyprus, including residential, commercial, and multifamily properties. Enrich your knowledge by reading books, participating in seminars, and utilizing online resources to grasp a firm understanding of the market and various investment techniques.

Choose the Right Location

Location is a fundamental factor when you want to learn real estate investing successfully. Research and identify areas with strong growth potential, low crime rates, good schools, and desirable amenities. A well-chosen location can significantly impact the rental income and property appreciation of your investment.

Secure Financing

Unless you have substantial savings, you’ll likely need financing to invest in real estate. Explore different options, including traditional mortgages, private lenders, and hard money loans. Compare interest rates, terms, and qualification requirements to find the best financing option for your investment. 

Although – this said, the best way to get financing is to save up a ton of money.  Most lenders are going to want 20% or 25% down payment – so you’ll likely need to spend some time saving.

Identify Suitable Properties

Once you’ve defined your strategy and secured financing, start searching for properties that align with your investment goals. Utilize online listings, attend open houses, and network with local real estate professionals to identify potential investment properties.

Make Informed Offers

When you’ve found a property that meets your criteria, it’s time to make an offer. Consult with your real estate agent to determine an appropriate offer price based on market analysis and property condition. Be prepared for negotiation, as the seller may counter your initial offer.   Also, leave your emotions out of the negotiating process.  You’ll make better decisions if you approach the deal rationally.

Secure the Property

Once your offer is accepted, you’ll need to complete the necessary paperwork and secure the property through a purchase agreement. This process typically involves earnest money deposits, inspections, appraisals, and finalizing the financing.

Real estate investing is a dynamic and rewarding venture that offers opportunities for financial growth and security. Though the prospect of investing in your initial property might appear overwhelming to novices, meticulous organization, learning, and commitment can lead to success. Adhering to the guidelines presented in this introductory manual will empower you to confidently embark on your real estate investment adventure and make well-informed choices that contribute to accomplishing your financial objectives.

Additional Reading, Plus Find A Community!

For some real world examples of how to build wealth in real estate, consider reading dinksfinance article on how they built their net worth to over $1,000,000 using real estate.

If you don’t like the idea of putting hundreds of thousands into a home, but you still want to make money in real estate, consider reading this article on Ark7, which a nice little app discussing fractional ownership of real estate.

Finally, if you want to get into real estate investing as a beginner – and are serious about it, consider joining the Bigger Pockets Forums (here), or the Saving Advice Forums (here), both of them will give you a community of real estate owners to work with.

Is Paying Points A Good Way to Reduce Your Mortgage Rate?

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paying points to reduce your mortage rate

 

For many people, buying a house is the most expensive purchase they’ll make during their lives. Since that’s the case, it isn’t uncommon to look for ways to reduce the monthly payments and overall cost. While negotiating is undoubtedly a great option, paying for points is another viable approach. If you’re wondering what mortgage points are, how they work, and whether they’re a good way to reduce your mortgage rate, here’s what you need to know.

What Are Mortgage Points?

Technically, mortgage points are a fee borrowers can pay as they set up a mortgage for a purchase or refinance. Homeowners can choose to pay the cost in exchange for securing a lower interest rate, though the fee is actually optional. There’s no requirement to buy points, so homeowners can choose to forgo the expense and keep the original interest rate offered.

How Mortgage Points Work

In some ways, mortgage points are a way to prepay interest. In exchange for a fee, the lender agrees to give you a better rate. Essentially, you’re compensating the lender for lost income, as the lower rate means they’ll earn less off of your loan over its life.

Mortgage points reduce an interest rate associated with a home loan by a set amount. In most cases, one point shrinks the interest rate by about 0.25 percent. For example, one point would turn a 5 percent interest rate into a 4.75 percent rate.

It’s important to note that each lender can set the value of their points. As a result, some may offer 0.25 percent per point, while others may reduce the rate by 0.125 percent, 0.2 percent, 0.3 percent, 0.35 percent, or any other amount they choose. However, the reduction must be disclosed to borrowers in advance, ensuring they know precisely what they’re getting in return for the fee.

If a borrower decides to buy points, they pay the cost at closing. The points are listed in the mortgage documentation, ensuring the new rate is officially part of the loan structure. Once the homebuyer closes, the rate after the deductions for any points purchased remains in place for the life of the loan.

The Cost of Mortgage Points

As with mortgage point values, each lender can determine its own cost for purchasing points. However, most lenders charge a fee of 1 percent of the loan total per point. For example, if you were financing $300,000, you’d pay $3,000 per point. If you wanted two points, that would cost $6,000.

While it may seem like 1 percent is the minimum amount you can pay, that isn’t always the case. Some lenders do allow borrowers to purchase fractional mortgage points. Using the example above, a homebuyer may be able to spend $1,500 to get a half-point on a $300,000 loan.

If they do, they secure an interest rate reduction that’s half the full point amount. For instance, if a whole point reduces the interest rate by 0.25 percent, a half-point would be worth 0.125 percent. For an initial interest rate of 5 percent, that half-point leads to a 4.875 percent interest rate instead.

Pros and Cons of Mortgage Points

Mortgage points do come with pros and cons. When it comes to the benefits, the biggest is that paying points can save you money over the life of your loan, particularly if you plan on staying in place long-term. If you want to confirm the savings, you’ll need to compare the total interest paid based on the two possible interest rates. That way, you can see the overall savings and compare that to the cost of the points.

If you don’t intend to stay in the home forever or may refinance in the future, you’ll want to find out if you’ll save enough to offset the price of any points. Usually, that involves calculating the breakeven point, which is the month that your interest savings covers the amount you spent on points. Precisely when that occurs varies depending on your loan terms, though you can use an online calculator to make determining when that happens easier.

Paying points may also help you qualify for a home loan if the monthly mortgage payment is higher than a lender finds comfortable. When you reduce the interest rate, the monthly payment goes down, potentially to the point where you become eligible for your preferred loan.

Tax Deductible

In some cases, the cost of your mortgage points is also tax-deductible. Since it’s considered prepaid interest, it can lead to deductions similar to traditional home loan interest payments. Precisely what that’s worth depends on your tax situation, so you’ll want to speak with a tax professional to see if this provides suitable value.

When it comes to drawbacks, the biggest is the higher upfront cost. While you might be able to convince the seller to cover the cost in exchange for a higher offer, paying out-of-pocket is far more common. That means paying potentially thousands of dollars in addition to your down payment, which may not be easy.

It’s also that paying points will cause you to pay more for your mortgage than you would without them. If you unexpectedly need to move or decide to do a cash-out refinance to consolidate debt or tackle some upgrades before the breakeven point, paying points costs you extra money instead of saving it.

If you’re looking at an adjustable-rate mortgage (ARM), reaching the breakeven may be impossible. Usually, the points only count during an initial fixed-rate period. If the breakeven point doesn’t occur during that window, then the points could also cost you more.

Is the Cost of Mortgage Points Negotiable?

Generally speaking, the cost for mortgage points isn’t negotiable. However, if you have exceptional credit and a solid down payment, you may be able to negotiate to lower the cost of certain other expenses, like origination fees or certain closing costs. By doing so, mortgage points may feel more affordable, even if the price of each point remains the same.

Is Paying Points a Good Idea?

Whether paying points is a good way to reduce the cost of buying a home depends on your unique situation. If you know with a reasonable amount of certainty that you’ll remain in the house and with your current lender until at least the breakeven point, it’s worth considering. Anything after the breakeven point is pure savings, giving you a clear financial benefit.

Similarly, if you can afford your dream home, but the lender is hesitant to fund a mortgage with a particular monthly payment because of your income level, paying points could be worthwhile. It could let you reduce the monthly amount to the point that leaves your preferred lender comfortable, allowing you to qualify when you otherwise wouldn’t.

Otherwise, it may be best to skip mortgage points. Those who plan to leave before the breakeven point won’t secure a savings. In fact, anyone who makes extra payments may struggle to recoup the cost if they ever move.

Similarly, refinancing before the breakeven point results in a loss, making points an awful idea. Finally, if paying points means not having enough for a down payment to avoid PMI, get the most favorable initial interest rate, or secure a lower homeowner’s insurance rate, then it may be better to go without paying for points.

Look at your overall financial picture and the plan for your home. That way, you can determine whether points are genuinely right for you.

Do you think that paying points to reduce your mortgage rate is a smart approach when you’re getting a mortgage? Do you believe that other techniques are more effective when it comes to securing a great rate or keeping costs down? Share your thoughts in the comments below.

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This Is NOT The Time to Purchase a New Home

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When mortgage interest rates are low, many people assume that makes it a great time to buy a new house. While lower interest rates are certainly a positive, other factors lean in the other direction, often outweighing any benefit a person may get from snagging a favorable interest rate. If you are wondering why now is not the time to purchase a house, here’s what you need to know.

Skyrocketing Home Prices

One of the most significant factors regarding why now isn’t a great time to buy a house involves home prices. The average home value in the United States is $298,933 (as of August 2021), representing a year-over-year increase of 16.7 percent. Plus, the prices in some cities rose much faster, and many are continuing their skyward trajectory.

While the rising prices may make it seem like buying sooner rather than later is a wise way to stay as far ahead of the curve as possible, that may not be true. It isn’t clear whether these growth rates will continue. Ultimately, there is a chance that once the current buying spree calms, the market will correct, bring home prices back down a bit.

Low Inventory Numbers

In many parts of the country, the inventory of homes is near record lows. Partially, this is because of the wide-scale buying activity spurred by the pandemic and reduced interest rates. However, some of it is also related to the time of year. Often, summer is a major buying season, putting additional stress on an already tight market.

When all of those factors come together, buyers simply don’t have as many options available. As a result, you may feel like you have little choice but to settle for a property that doesn’t meet all of your needs because that’s what is on the market.

With a purchase as significant as a home, settling isn’t necessarily smart. You may discover quickly that what the home lacks is actually problematic, leaving you dissatisfied with the house.

No Leverage to Purchase a New Home

When inventory is low, and prices are moving up, buyers lose a lot of leverage. Sellers don’t necessarily need to negotiate, as they know that they have a good chance of finding a different buyer who is willing to pay more or ask them for less.

For example, even if a home inspection reveals an issue, getting the seller to reduce their price or pay for the repair may be challenging. If the seller believes another buyer would go forward with the purchase at their preferred price anyway, they might refuse, leaving you in a tough position.

Today, it’s far more common for a home purchase to go through with a price above the initial asking. Additionally, fewer contingencies is a tactic some buyers use to make them more attractive to sellers. If you’re looking to purchase a home in a “hot” area, you need to decide if you’re willing to go to similar lengths. If not, waiting may be your best bet.

Rushing the Decision

Rising home prices and low inventories mean buyers have to act quickly. Otherwise, another prospective buyer might snatch up the property before you have a chance to make an offer. This creates a sense of urgency, one that may cloud a buyer’s judgment.

The issue with this scenario is that rushing could lead to poor decisions. You may extend an offer because you’re afraid you’ll miss out on a house, not because you feel strongly about having it.

Plus, the current state of the market adds an extra level of pressure to the situation. Often, buying a home is stressful when conditions favor buyers, let alone when it’s a seller’s market. The additional pressure could also lead to rushed decisions, increasing the odds you’ll overlook a problem or make another kind of misstep.

Are There Any Reasons to Purchase a Home Now?

A home purchase is a big decision, one that’s highly personal. For some people, buying now is going to be a necessity. If that’s the case, then make sure you understand the local market and what it means to go forward with a purchase in the current climate.

However, if you have the ability to wait, doing so could be smart. Market conditions are favoring sellers now, but that may not be the case long-term. You want to make sure that you factor that into your decision-making process. That way, you can make the choice that’s best for you.

Are there any other reasons that lead you to believe that now is not the time to purchase a house? Do you disagree with the points above and think that buying now is a good idea? Share your thoughts in the comments below.

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Do This If You’re Priced Out of The Housing Market

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priced out of the housing market

Many people would love to buy a house, only to be stymied by the prices in their LA local housing market. In many parts of the country, home values are moving up quickly, making it harder for prospective buyers to find a suitable property that they can afford. Luckily, even if you’re priced out of the housing market, that doesn’t mean you can’t achieve your dream of home ownership. If you aren’t sure where to begin, here are some things you can do.

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Should You Invest in Mobile Homes?

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Mobile homes get a bad rap, but they could really be a good place to invest money. Investing in real estate is a good way to diversify your portfolio. Mobile, or manufactured homes, could be a good little niche in that sector. Should you invest in mobile homes?

What is a mobile home?

Mobile homes, also known as manufactured homes, are residential structures built in a factory or separate location and moved to the desired location. These homes are built according to HUD guidelines.

Those guidelines are as follows:

  • Design and construction
  • Strength and durability
  • Transportability
  • Fire resistance
  • Energy efficiency
  • Overall quality

Why invest in mobile homes?

Social stigma around mobile home parks prevent people from investing in them

Investing in individual mobile homes is difficult because the people that rent them are a (and I’m making a big generalization here) a challenging bunch to deal with. Invest in the grounds and infrastructure where the mobile/manufactured homes are.

There are several benefits to investing in mobile home parks:

  1. Recession-resistant (held up through the GFC)
  2. Tenants rarely leave, but sometimes, evictions are necessary (as they are with any real estate endeavor)
  3. Supply is waning, demand is increasing
  4. Predictable maintenance costs
  5. Stigma reduces competition with other investors
  6. Great financing options
  7. Limited need for contractors
  8. They’re inexpensive (you can buy individual units to rent on your property for less than $10,000 – depending on the area and demand)

(List provided by BiggerPockets)

Conclusion

As I mentioned in the beginning, investing in real estate is a great way to diversify your portfolio. It can also be a good way to get a return on your money.

Within the real estate sector, mobile home parks can be a very good niche, for the reasons I mentioned above. Should you invest in mobile homes?

Related reading:

Why Financial Literacy is Important

How to Invest in Real Estate without Getting your Hands Dirty

Hard Money Loans: Benefits for Real Estate Investors

 

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Moving Back to the House

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For today’s personal reflection, I’m going to talk about moving back to the house that K and I are currently renting.

K is my son’s mother and we are getting back together. I’m excited to grow with her and to make our relationship into something even better than it was before. But that’s not the point of today’s post. Today we’re talking about moving back to the house that’s being rented.

Current living situation

As a result of K and I getting back together, we had a conversation about where we wanted to live and raise our son. My current place that I’m renting was an easy choice because it’s within two minutes of my work and has a large enough basement that our son can play when it’s cold and/or rainy outside.

We’re moving!

After we had a conversation and I had time to reflect, the better choice is to move back into the house we own together. Our renters are moving out at the end of their lease and mine is up at the same time. I feel more at home in that house and in that city than I do currently. The drive is significantly longer, but I enjoy driving. It gives me time to either get into work mode or get out of work mode (depending on the time of day).

At the house, our son has a yard to play in, there are two playgrounds/parks within a few blocks, and we are near some water. What also played a role in the decision is where our son is going to school. We decided to enroll him in a private school, which makes the location of where we live a little less important.

Besides the drive, the only other thing I don’t like about this house is the basement. It’s a very old home. Over 100 years old, so the basement is very short and uneven.

The short-term plan

What we decided to do is to stick it out. We’re going to live in this home for a few years, pay down some outstanding debt, and save for a down payment. When we’re ready, we’ll look for a new home that checks all of our boxes.

There are some big and exciting changes coming down the line, and I’m very excited to take them on with K.

Related reading:

The Complete Budgeting Checklist When You’re Paying Down a Mortgage

Mortgage Math: How to Calculate Your Mortgage the Right Way

How Buying a House and Saving for Retirement are Similar

 

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Down Payment or Investment Opportunities?

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Down Payment or Investment Opportunities

The current dilemma I am having is whether to stash my savings for a down payment on a house or contribute to my Roth so I have cash available for buying opportunities.

I’m pinching pennies, and I’m saving money wherever I can so that cash is accessible when I need it. I just don’t know what to do with it.

Do I put it towards a down payment or set it aside for investment opportunities. Like most things in life, the answer will lie somewhere in the middle.

Down payment

I’ve mentioned in prior reflections that I’m renting right now.

I’m renting because I got divorced and exhausted all of my savings on the down payment for my house. That house is currently being rented by another family, and my ex-wife and I still own it.

That’ll help build equity into the house so we receive more if/when we decide to sell, which is good.

I’m happy with my current living arrangements. I like the place. I like the neighborhood. My commute to work is 2 minutes, and I’m close to all of my family and friends. All good things.

The only bad part is I have no outdoor space to call my own. I have no yard.

I’m trying to frame it positively by saying that I’m not spending my time on yard work, and instead, have more time to spend with my son/work on myself when he’s not here. These are both very good things.

However, I want to give my son a space to play. A place to put a jungle gym and a sandbox. A place where he can just run around and have fun.

I want to give him that because he deserves it. I want to use my savings for a down payment on a house so we can have a place to call our own. 

Investment opportunities

Here’s the second part of my dilemma. I see a lot of chances to put my money to work in the market.

I’m able to play the long game because of my investment philosophy and my training. The best investors I have long-term time horizons.

What I mean to say is I can see past the present and I have an idea of what my investments can do over the long term, and the [possible] reward for investing now can’t be ignored.

That’s why I’m having a difficult time deciding what to do.

What will I do?

As a parent, you want to give your kids everything. I want to have a place we can call our own.

At the same time, I know how valuable it is to start saving and investing early so I can take advantage of compounding returns.

So here’s what I’m thinking. I’m going to develop a “savings plan”. I’ll take the dollar amount for an ideal down payment and how far in the future (in terms of years) when I’ll want to use it.

I’m thinking of $25,000 for a down payment and four years until I’ll use it. I’ll, then, divide $25k by 48 to get my monthly savings goal. Anything over that number I’ll put in my Roth.

That’ll take care of saving for a house and for retirement.

My Last Reflection:

My Experience with Life Insurance

Related reading:

Your Go-To Budget Guide

What is Time Horizon and Risk Tolerance?

My Life and How I Manage Stress

My House and What Brought Me Here

Guide to Cash Home Buyers: 3 Ways They Help You Sell Your House

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Cash home buyers are a relatively new trend, but have become an alternative to selling your house traditionally through an estate agent. Cash house buyers are generally companies with a team of people that are experts in surveying, estimating, buying, and selling houses. By having all of these skills in the business, they don’t have to rely on third-party people or companies to estimate or survey your house. This means you can get an estimate on your house very quickly, and the company will make a cash offer for your house. This comes with several advantages. Whether you’re looking for a Crawford Home Buyers or one in your location, there are many sites that offer quick and easy cash sales on your property.

Avoiding selling fees

As cash home-buying companies have all of the stuff necessary to make the sale, you avoid the significant fees that come with selling a house. This includes the money spent on getting an estimate, which will usually be done by a third party for a cost. It also includes solicitor fees. Usually, both you and the seller will pay solicitors to do all of the communications and negotiations. With a cash home seller, this isn’t necessary. Some cash home sellers will try to add in a fee for the survey and estimate of the value of your home. If this is the case, then make sure to avoid them, as some can charge over $1000 for this service. Find a company that’s as inclusive as possible.

Quick sale

Most house sales take a considerable amount of time. Depending on if the house is a new build or not, you may find yourself in a chain of sellers all needed to get confirmation on the purchase of their own home before you can buy theirs. If one sale falls through, then you’ll need to wait for your seller to buy a new house before you can move in. This process can sometimes take a year or even more. This is how cash home buyers can help. Because cash home buyers are never in a chain and are buying your house with cash, the time of the sale is reduced significantly. There’s no waiting for your seller to find a new house, and there are no issues with mortgages falling through.

Lower stress

Selling a house is a traditionally stressful job. There’s a lot of money at stake, and the process can take a long time. This is particularly stressful if you need to sell the house of a loved one that has passed, or if you need to sell quickly to get the money to cover another investment. This is where cash house buyers can be very useful. You can get your house sold in a short amount of time with the least amount of stress possible. Be aware that the amount that a cash house buyer will buy your house will typically be 10-15% lower than if you sold privately through an agent. Some of these fees will be covered by the saving you make in fees, though, and the rest can be attributed to the cost of having a stress-free sale.

Investing In Commercial Real Estate: A Different Breed Than Residential Real Estate

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When I first heard of commercial real estate investing, I envisioned concrete and strip malls…the type of stuff that’s killed the unique atmosphere of American cities. However, imagine my surprise when I actually dug into commercial real estate and found that along with the occasional ugly strip mall, there are unique opportunities, provided you know how to evaluate properties.

Commercial Real Estate In A Nutshell

Commercial real estate invests in places where businesses operate. While you may think of retail shops or restaurants, there are huge opportunities in office buildings, doctor’s offices and other specialty properties.

Should I Buy Individual Properties?

This argument is similar to a stock vs. a mutual fund. If you want the opportunity for a larger return, purchase an individual property. However, if you’re looking for steady returns that gravitate toward the NAREIT Index average, you’re better off with a fund, ETF, or REIT.

How Is Commercial Real Estate Different than Residential?

You can diversify your risk with commercial real estate – Because in most cases you’ll have multiple tenants, you’ll only lose a portion of your income if one breaks the lease.

Commercial leases are much longer – While residential leases may go a year or two, commercial leases may be three, five, or longer.

You’ll need more cash up front – First, you’ll need the right lender who understands commercial real estate for your business mortgage. Second, they’re probably going to demand 30 percent or more of the cost upfront as a down payment.

You’ll receive more ongoing cash – Commercial properties are bigger income generators than residential properties.

How to Buy Individual Properties

As with anything, the key to picking the right properties lies in working with the right team of professionals (such as Elena Vlasyuk in Los Angeles). If you have a good team in your corner, you’ll be able to more quickly identify top opportunities and spring on them.

There are many websites that aggregate news about real estate, such as National Real Estate Investor. By staying on top of current trends, you can begin to understand the world of commercial real estate.

Want Commercial Real Estate Without The Hassle?

You’re probably better off looking for a mutual fund, ETF, or closed REIT. Of the three, closed REITs can give you the most unique opportunities but are also fraught with fees and risk. Unless you know the details of the pool you’re stepping into, non-traded REITs should be avoided. Instead, by finding a good commercial REIT fund or ETF, you can invest less money, receive competitive real estate returns, and liquidate a portion whenever you need cash.

Still not sure if you’ve decided which is right for you? Start off with your plan and you’ll avoid making a bone-headed financial move.

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