Hey there! Today I want to talk about real estate as an investment opportunity, because this is a common question that we get. Real estate, in the state of Texas especially, is somewhat affordable. A lot of people look at opportunities to pay down a mortgage on a house; keep the house, purchase a new house, and use their old house as a rental. This is a common strategy to begin building up rental properties and look at a re-occurring income stream, is kind of the way that it’s perceived.

I want to just put some feelers out there to let you know that this is a great strategy, one if you’re looking at wanting to do this as a business and you really have an interest in owning real estate and managing property. If you’re looking at this as an opportunity to say ‘hey my mortgage is cheap I don’t really need to worry about being able to manage that, you know you can get renters and their rent will pay for the mortgage’ this will be a great deal. I want you to take a step back and really take stock of what the total cost is of that home. If you have never owned more than one property at one time, you’re going to find out very quickly that things tend to break at the same time; AC goes out in one house it goes out in the next house shortly after, hot water heater, whatever it might be.

Also, in the state of Texas, especially in Houston, we had some major things happen in the last few years. We’ve had Hurricane Harvey we’ve had prior to that the Tax Day flood, the Memorial Day flood, we had a freeze so all those things happening to homes in the last few years think of that if it was doubled or tripled in your situation. So now the simple income stream of ‘well I’ll just have renters pay for my mortgage and build equity in my house this will be a great and wonderful thing’ it’s just not that simple. It can be a great opportunity for the right people, if this is something that is a real interest to you this is a business you want to start you want to accumulate four five six different properties then that’s wonderful, especially if you have the capital to do it. But if you are thinking that this is just an easy way to make some money, I’ve seen on numerous occasions that it just doesn’t work out that easy.

This isn’t to discourage you, but it is to encourage you to do the work to talk to people who have done it themselves, look at the total cost and your capital what you can manage and afford. If you’re struggling to have an emergency fund to cover your basic emergency needs think about what emergency fund size you need for two homes. So again, this is just some little tips and things to think about if you are considering real estate as an investment opportunity. If you have more questions or are curious how that may work in your plan feel free to give us a call at 832-856-2825. We would love to speak with you and help you explore this as an opportunity for your plan. Have a great day!