With Eleanor Blayney, Consumer Advocate at the CFP Board, Author of Women’s Worth: Finding Your Financial Confidence
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In her conversation with Steve, Eleanor addresses being a real estate investor. As real estate valuations go up and interest rates remain at all-time lows, many investors are looking at supplementing their retirement income with monthly payouts from rental properties. But while people are regaining their appetite for real estate and considering becoming a real estate investor, it’s important to understand the nuances of real estate investing, including the risks, headaches and uncertainties involved.
It’s also important to understand that real estate need not be viewed as an alternative to the stock market. And while investors like the ability to touch and walk around their real estate investments, without the volatility surrounding stock investments, investors should not forget that real estate too can be a pretty volatile asset, as we saw in the collapse in 2007.
So those who have become a real estate investor should really be viewed in the same vein as running a business with its own set of risks, upside and uncertainty. For example, that rental check that you expect next month may well not arrive for a host of reasons, or your tenant may file for bankruptcy, call you for unexpected and often expensive maintenance and repairs, etc. So real estate investing is not a slam dunk and has a host of uncertainties, not to mention large upfront purchase costs and the burden of servicing a loan, navigating the complex tax code around real estate investing or the lack of liquidity because you can’t pull your money out as easily. So tune in to hear all the nuances of real estate investing before you jump in and make some serious mistakes.