Learn The Stock Market And How to Trade

When I talk to many people about their retirement portfolios we often talk about their stocks and bonds.  This is because these assets easily build up in a 401k with no load mutual funds or the well commercialized stock market industry having everyone think they should be a trader.  If you ask about which property investments the person owns they usually respond with “my house.”  Unfortunately it’s hard to count your house as a property investment because you’ll be less likely to sell it if you need the money now, it provides no monthly income unless you rent a room out which is invasive to most peoples’ home life, and even though you say you’ll sell your big expensive house in your later years most of you won’t because it has become your home. 

Personally, the property investment advice I prescribe to is 1/3 of my portfolio will be in real estate.  Unfortunately the price of entry for real estate is higher than stocks and bonds so I plan on entering more in my mid game.  Here are a few of the options I’m looking at.

Rental Property Investment

I think rental properties is the most obvious entry point for new investors.  They feel like buying a house like you already have experience with and then you’re just getting someone to pay you what your mortgage cost plus expenses.  If you want to get in with little money you probably will be spending money each month on the upkeep of the property, but you’ll gain when you sell the place in the future or your mortgage gets paid off and you turn way cash flow positive.  The traps many people get into is assuming nothing bad will happen to the rental property and you’ll always have tenants.  I will probably look elsewhere as I don’t deal well with day to day people I don’t know, I tend to work better with business minded people when it comes to money.

Commercial Property Investments

The commercial property investment can be anything from a warehouse you lease to another company to a strip mall.  These are good if you have a business mind because you can work with the company to write a lease that pays you more as they make more, then you have the ability to help them be more profitable.  The bad side of these investments is they are more tied to the general economy like your stocks then residential households.  Don’t consider these if you’re looking for less correlated investments to your stocks and bonds.

Overseas Property Investments

The biggest reason I’m looking to overseas property investments is I want an excuse to own beach front property in the Caribbean.  Unfortunately, so does everyone else.  Overseas investments can be great because they are more overlooked by the global community and as the population expands the thoughts of moving and retiring over seas will become more and more appealing.  The tough part is working with the foreign laws and communities.  For this reason I propose you work with property investment companies to deal with the legal transactions.

Investment property is worth the effort and can provide amazing leveraged returns over the long haul.  Just take your time and research as with any investment before purchasing.  If in doubt keep the transactions simple with a long term mindset as those have the highest probability of a positive outcome.

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