Seasonal Décor Updates That Are Making Utah Homes Feel More Inviting To Potential Buyers
First impressions undoubtedly matter more than ever in Utah’s competitive real estate market, and this is particularly the case during the winter season.
One of the greatest assets you can have is property. It can boost your net worth and help you earn passive income through rent payments. You can then use this money as your retirement fund. Here’s a step-by-step guide for Utah homeowners to start thinking like an investor for your retirement.
What Buy and Hold Really Means
Buy-and-hold is an investment strategy where you purchase a property and hold it for a long-term time frame, typically multiple years. Wise investors do this for two reasons. First, it gives you a form of passive income from monthly rent payments, which you can then use to pay for mortgage, taxes, maintenance, insurance and other miscellaneous fees.
Second, your property’s value appreciates over time, which also builds your net worth. Think of it like planting a tree. It takes time, but eventually, it grows high, providing you with both shade and fruit.
Buy-and-hold investing attracts many investors because it is considered a low-risk, safe choice for retirement planning. In fact, this strategy outperforms other strategies that try to time the market.
The 4-Step Playbook for Your First Utah Rental Property
Purchasing your first rental property and learning all about Utah’s housing market is a lot to take on at the same time. These four steps can help demystify the process so you can start building your retirement fund as soon as possible.
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Step 1: Location and Property Type
Buying a house is a massive investment. As such, you need to make a wise choice. With a buy-and-hold strategy, you need to choose houses in areas where there will be a constant demand from tenants.
Examples of these locations in Utah include areas near universities like Provo and Logan, military bases such as Hill Air Force Base, and employment hubs such as Silicon Slopes in Lehi and Downtown SLC.
Step 2: Financing Your Investment
Before purchasing the ideal house, you need to get your finances in order. Social Security benefits only account for 40% of your income prior to retirement. This means that you need to find alternative ways to finance the remaining 60% if you want to maintain your current lifestyle.
Lenders typically require a large down payment for investment properties compared to smaller down payments for primary residences. Ensure you consult with your mortgage broker thoroughly about your financial goals before selecting or viewing houses. They can help prepare your finances so you can get the best deal and avoid worrying about the nitty-gritty aspects of loans.
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Step 3: Prioritize Cash Flow
Remember that your primary goal for the property is to make you money. Since you’re taking on debt, you need to ensure the monthly rent payments you receive exceed the costs of the mortgage and other expenses. This ensures that you have a positive cash flow over the years.
Try creating a spreadsheet with your top three house candidates. Create a comparison chart of the cash flow each property can potentially bring. This will help you make a rational decision based on tangible data rather than emotions.
Step 4: Turning One Property Into a Portfolio
Consider using the buy-and-hold strategy a second time to continue building your retirement fund. After a few years of paying down the mortgage and market appreciation, you can begin to consider purchasing a new property to build a portfolio. This accelerates your retirement fund and net worth. You can even do some simple renovations and upgrades to increase the rental value of your property.
Your Future Self Will Thank You
Building your retirement fund is all about choosing stable investment avenues. The buy-and-hold strategy enables you to own a rental property and earn income from it through monthly rental payments. Consult with professionals to help you navigate the Utah real estate market and start building your retirement dr
