When setting financial goals for the New Year, it pays to consider your real estate net worth. For most people, the wealth they have in real estate is due to their primary residence. For people who got into real estate investing in the Denver area, the net worth statement looks positive because vacancy rates are low and market rent is high. When you hire a property management company to take care of your Denver rental properties, you will find your net worth increases without very much effort on your part. According to an article by Financial Samurai, real estate is an important part of your net worth mix that also includes stocks, bonds and risk-free CDs or money market accounts. Whether you have more of your portfolio tied up in real estate or in other investments depends on your risk tolerance and age. Some of the best communities to own rental properties include Parker, Littleton, Highlands Ranch, Cherry Creek, Aurora, Lakewood and Centennial.
Owning real estate by age 30
By the time you are 30 or older, you have enough work experience to qualify for a mortgage on your primary residence. If you purchased a home earlier in life, you are ready for real estate investing in a hot rental market such as Denver. According to Financial Samurai, a person with a medium risk level strives for 40 percent of their net worth in real estate by age 30.
Enjoying passive income in retirement
If you are a pre-retiree, you are looking for ways to boost your net worth before you claim Social Security. Owning professionally managed rental properties in Denver provide passive income when you need it most. Whether you live in another state or in the Denver metro area, you can retire in style instead of living like a pauper. According to experts, the median 401(k) balance is just $100,000, even though most retirees need significantly more to pay their bills.
Being bullish on real estate
According to another piece by Financial Samurai, the only way to take advantage of the current housing recovery is to buy more than one real estate property. Owning your own home has distinct advantages over renting. Mainly, you have a paid-off place to live when you retire. By owning rental properties, you build wealth over time. Experts point out rental yields are higher than interest rates, which are still at historically low levels. In the Denver area, property owners not only make income off their rentals, but enjoy the appreciation as the value of homes rise.
If you want to get into real estate investing in Denver, don’t go it alone. At Legacy Properties-PM, handle your property management needs. We are members of the NARPM, the National Association of Residential Property Managers. For more information on building your net worth through real estate investing, please call 720 989 1996 or contact us.