Five Easy Ways Real Estate Can Give You A Better Work/Life Balance
It’s not just super-wealthy who can make money in real estate to ease the stresses of life. Everyone can get in on the act.
Besides losing weight and generally being healthier, most New Year’s resolutions involve some kind of strategy to make more money and thus live a more balanced, less stressful life. For real estate investors, it could mean flipping more houses or buying more rental properties. Both incur risks and an influx of cash. The reality is, for those New Yorkers who don’t have a rich uncle, the hard slog of attaining the money to fulfill the real estate dreams often seems remote and unattainable.
The main issue those living in expensive cities face is that the cost of living eats up all their capital—with little else left to invest. Here are five strategies to help cash-strapped urbanites find a work/life balance through real estate.
Consider moving out of the city and subletting or leasing your apartment
Mentioning leaving the Big Apple to many New Yorkers and they’ll look at you like you just killed your own mother. However, if you’re prepared to travel in an hour to 90 minutes everyday, (NJ, PA, CT & LI are all within reasonable commuting time) not only will you find time to write the novel you’ve always been promising yourself or learn a language, you’ll also find extra money in your bank account every month. Save a little and you could start thinking about financing your first flip.
Flip properties outside of the Tri-State area
Yes, real estate does exist beyond New York and California. In fact, some of the most lucrative “flip” markets are in places like El Paso and Oklahoma City. And guess what? You could buy an entire house for the cost of the down payment on a New York property. OK, so you might not want to travel so far if you’re a New Yorker—but great opportunities do exist within driving distance in NJ, PA, and CT. Don’t think you have to rehab a Bed-Stuy brownstone to make money.
Live in pesos, earn in dollars
Since author/entrepreneur Tim Ferriss released his best-selling book “The 4-Hour Work Week” in 2007, the concept of living in pesos and earning in dollars has caught on. Why incur the expenses of living in the US—or the West, for that matter—when you can live in a warm, cheap country and run a business online that makes money in the US (or western) currency from a rental property or two? Once you minimize your living expenses, everything else is gravy.
Forbes reports that the advent of the recent polarizing US election has seen a spike in people wanting to take flight to new pastures. According to InternationalLiving.com, there was a 160 percent surge in searches for terms like “move overseas” and “expats overseas” the day after the election. Canada’s immigration website reportedly crashed on election night. Mexico, Costa Rica, Panama, Belize, and Peru are the five best places to relocate—if you consider factors like the cost of living, healthcare amenities, and weather. Owning a few fairly cheap investment properties in the US could finance a fabulous life in the sun.
Finance your kids education by buying one rental property
Sure, there are a lot of college saving programs out there, and if you’re comfortable contributing to a 529 plan or even a whole life insurance policy to finance your child’s college degree, that’s fine. However, buying one rental property when you child is born, having a tenant pay off the mortgage and apply the cash flow to additional principle payments could see it paid off by the time the kid turns 18. You could then sell the property to fund college or continue to use the profit from the cash flow—minus a mortgage payment—to help pay for those exorbitant credits. They’ll also be tax deductions, too.
Another strategy along these lines is buying a rental property in the town your child attends college and having his/her roommates rent go towards college fees. Tax deductions apply also, and your offspring will gain a valuable lesson in being a responsible property manager. Now, that‘s something they won’t teach on their pricey campus
Chip in with friends or family members to buy a multi-unit building in a coveted location
There is no questioning the fact that NYC real estate prices seem almost impervious to what’s happening to the market in the rest of the country. A Bed-Stuy brownstone which costs $1.5 million today will be $2.5 million in just a few years time. How can you jump on a train which has already hurtled out of the station? By chipping in with others. Four people contributing the down payment towards a four-unit townhouse is a lot easier than one. With a million dollar-equity increase, who would say no to a cool quarter of a mil profit which can be preserved by trading up via a 1031 Exchange?
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