Many, often, expose some of the essential elements of financial planning, but do so without paying attention to what this should include and mean! There are many necessities, including the need to include all possible elements that can improve the ability of everyone to be as financially efficient as possible. However, many see only this, in terms of equities, bonds and other investments, without fully considering, when real estate should fit in, the overall equation. Smart financial planning, both from a global and a specific point of view, is needed to determine how to create the right balance and direction for each of us. There is no one-size-fits-all approach, but this article will instead attempt to examine, examine, examine and discuss the reasons why, in most cases, real estate should be, a vital part of his personal financial plan.
1. Start the process: This process should be initiated by self-assessment and the identification of personal and financial goals and why. Real estate should be divided into two categories: personal housing; and invest. For most people, the value of their home represents their biggest investment, as well as housing and owning a piece of the American dream! In many cases, from a historical point of view, investing in real estate has been a quality decision because not only does the property itself help keep pace with inflation, but there are tax benefits ( including depreciation, etc.). ), and, when, correctly, a positive cash flow. Before, this can be done effectively and efficiently, it is important to be prepared for financial needs. These include: funds for down payment and closing costs; financial reserves for repairs, renovations, maintenance and upgrades; and; a contingency reserve. When investing, consider cash flows, rates of return, and both opportunities and ramifications.
2 Do you want to own? Are you ready, willing and able, and able, to own, and the associated responsibilities, stress, tensions, troubles and potential tensions?
3 Balanced portfolios: Savvy investors seek to diversify and, in so doing, mean well-balanced investments in stocks, bonds, savings, real estate, and so on. The real estate traditionally increases, in value, to or slightly more than the inflation rate, while bonds, often not, and shares, are often selective and difficult to balance and choose, correctly and correctly. effectively.
4 Personal house: How important is it for you to realize part of the American dream by owning your own home? It makes sense to determine whether you should buy or rent a home, the advantages and disadvantages, and ways to prepare financially for the unexpected and enjoy it!
5 Invest in real estate: Some people use real estate investment trusts or REITs to participate in real estate investments. They hope to take advantage of professionally managed portfolios, but should recognize that some are more conservative and income-oriented, while others may be less safe and more speculative! Others start by buying a two-family home and it is wise to evaluate the costs, potential and risks.
Smart investors balance their portfolios, and therefore their risk / exposure. Are you willing to commit, to proceed with wisdom and with your, eyes wide open?