I Wonder If I Should Just Live In My Car? A Rising Rate Story

0 Bedrooms 0 Bath For Sale

Sounds like an absolute steal. Can you guess how much? The low low price of $416,000, delaying retirement, and potentially living paycheck to paycheck since the recent rate hike would absolutely balloon your monthly payment. Now the hand drawn dog house above does look pretty inviting.

I’m kind of kidding. Kinda.

Look buying a home right now is tough. Especially for the retail investors and the people that don’t have cash laying around. If you’re trying to build wealth and don’t have a stockpile to pull from a 30% down payment on a $400,000 ($120,000) and a monthly payment of $2,645 can take a long time to save for and not a low payment to handle. Keep in mind at 4% that same home would only cost $2,005 a month.

So how do the normal people get into real estate?

There is still hope for that didn’t win the last Mega Millions Jackpot. Here are some very realistic ways to still get into (or continuing investing in) real estate…

1) Either put 20% to 30% down on a property or get creative (see here) with something like an FHA loan (as little as 3% down). While the payment will still be higher than what we’re use to you can rent out the home or half of a multi family to see rent cover the majority if not all of the mortgage payment. With higher payments you’ll see less cash flow.

2) Invest in REITs. These are companies that trade in the stock market and manage/own commerical real estate. They payout the majority of their income in dividends and most have very strong track records of dividend and company growth. You can make it even easier by just investing in an REIT ETF like Vanguards VNQ. Currently Real Estate Investment Trusts are getting pummeled and are also on sale.

3) Crowdfunding. I haven’t personally tried this one, but those who invest for a bit longer term have overall seen good returns.

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