Lifestyle (Home, Travel, Family),Personal

Why I’m Investing In Real Estate

Pinteresting Plans 30A rental property at the Hub

Some of you know we bought a short term rental property last year down in Florida. They say invest in what you know, and I LOVE houses and know real estate better than the stock market. I have an IRA that is invested heavily in stocks (since I’m only 39 we have time to ride the waves of the market) but I wanted investments I could access cash from sooner than the traditional retirement age.

I read lots of books (I mentioned many in this blog post) and listened to at least a hundred real estate investing Podcasts) and decided like with all my other career adventures I had to put skin in the game. The best learning is on the job training in my opinion. As a nurse and blogger this was absolutely true and I as I transition into a real estate investor I expect the same.

I am not a financial expert so please read this as my personal options and not investment advice. Any investment is a risk you take for potential future gains. Market crashes both in stocks and real estate are a real and unpredictable thing. There are lots of ways to lose money in real estate – I HAVE DONE THEM, so do your research.

I wanted to highlight what I feel are the main pros and cons to real estate investing.

The Cons of Real Estate Investing

I would say the biggest con of real estate investing is the hassle factor. Even with a property manager you may be managing the manager depending on the set up. Bad tenants, expensive repairs, a lot can come up.

It’s also much harder to liquidate an asset like real estate in comparison to stocks. Perhaps that’s not a bad thing if you are prone to letting your emotions control your investments. A buy and hold strategy is popular for a reason.

The Pros of Real Estate Investing

In additional to cash flow (what the property takes in as income above expenses and reserves for future repairs and events) I like that real estate in general appreciates (more in certain parts of the country than others), there is mortgage pay down by tenants if you take out a loan, and there are great tax benefits for real estate investors.

We decided we love real estate enough that we wanted to change our geographic location. While Connecticut is lovely we see more opportunities for what we want to do down in Florida. My husband got his real estate license to save us money on our own transactions and also help others in our new area acquire and/or sell properties.

If you aren’t familiar with the tax benefits of real estate investing this book: The Book on Advanced Tax Strategies: Cracking the Code for Savvy Real Estate Investors is short enough that it’s easy enough to get through pretty dry material. It’s the second book in a two part series but the first was basic enough that I already knew the information from prior education. I listen to a lot of audio books but that’s one I’d recommend getting the hardcopy of because we reference it fairly regularly.

Where to Invest

That is up to you!! Invest in a market you know. I studied the Florida market for close to a year before we purchased but I don’t think you need that much time, especially if you are investing locally. I absolutely LOVE the area we are moving to so I can enthusiastically recommend it to others. Do you have such a place of your own?

Some markets, like San Fran, price out a lot of investors but you can get creative in most areas if you are determined! Figure out a way to add a bedroom or buy a large lot and sell off a portion of the land…these are just some ideas for how to get creative.

Other Investments

A couple weeks back I talked about how I have custodial Roth IRA’s for my kids. If you’re interested I can recap that on the blog and talk about other investments my husband and I have. Let me know in the comments below!

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12 Comments

  • Reply
    Lucy Walsh
    March 31, 2021 at 5:07 am

    I would love to hear about your other investments. Thanks! Lucy

    • Reply
      Rachel
      April 4, 2021 at 10:03 am

      Working on another post! Thanks Lucy!

  • Reply
    Kirstin
    April 3, 2021 at 7:58 am

    I would love to hear more about the investments you have! My husband and I are interested in doing more but sometimes it’s overwhelming deciding what to do.

    • Reply
      Rachel
      April 4, 2021 at 10:05 am

      My best advice is to invest in things you know. I know real estate better than stocks…so I take the safer road with my stock investments by investing in things like index funds where as with real estate I’m willing to take a little more risk because I have a better understanding of future potential. In the end – educated guesses I suppose! Markets can do crazy and unexpected things.

  • Reply
    K Greenwood
    April 3, 2021 at 9:56 am

    I’d like to know more about your other investments and the custodial Roth IRA for your kids.

    Do you still own your beach house in New England? I can’t remember where it was but I do remember you doing a countertop project there.

    • Reply
      Rachel
      April 4, 2021 at 10:06 am

      We sold that property in 2020 and reinvested the money in Florida. I will share more about the other investments soon! Thanks for stopping by!

  • Reply
    Leslie
    April 3, 2021 at 11:41 am

    I love hearing about your investments, have had real estate before and learned the good and bad. I am a believer in investing in it. I enjoy following you on your journey. I’m sure it will be a success.
    ❤️fashion and home decor posts also!

    • Reply
      Rachel
      April 4, 2021 at 10:08 am

      Thanks Leslie!! I have had some bad real estate investments as well!! But I sure learned a lot of very valuable lessons so I think it’s just all part of the process of becoming better at something!

  • Reply
    JENNIFER L BONCZEK
    April 3, 2021 at 6:48 pm

    I have a question. When investing in properties do you put down the traditional 20% deposit? And in the case that you are buying multiple properties is this tough to do ? Or it is different when they are investment properties?
    Does income play into what you can purchase and how many properties?

    • Reply
      Rachel
      April 4, 2021 at 10:13 am

      There’s a book about investing with low, or no, money down: https://rstyle.me/+nPiIZzCVMtTYN8ztrVeBPw
      We have chosen to put down traditional down payments. As you want to buy additional properties you need to show income from other properties you own so they don’t count against you in the debt to income ratio that most lenders use to approve you for loans. So income and cash reserves play a role if you use traditional lending which is not how everyone choses to get into real estate investing.

  • Reply
    Kelly O'Neill
    April 3, 2021 at 7:55 pm

    Thank you so much the info and book recommendations!
    I would love to know more about the Roth IRA’s for the kids and other investments you have!

    • Reply
      Rachel
      April 4, 2021 at 10:14 am

      Thanks Kelly! I started working on that post. I hope to finish it up this week when my kids are back at school. Thanks for the reply.
      Rachel

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