Got the call today that we are approved to make that next, albeit nerve wracking, step towards purchasing an investment property. We have our eye on one. Said we would visit it last weekend. We didn’t. Maybe I’ll see if it’s still there this Saturday to go see. If it is, maybe it was meant to be.
Regardless, I’m not out to buy something just to buy something… But I on the other hand I do what to buy something. Hmmm…
This diversification of my current portfolio is going to lose me money in the short term. I’ve sold stock to fund this purchase that has been up 30% over the past 12 months. ADP to be exact.
I sold some of my holdings around $129, but with a purchase price of under $100 per share. I’ll take that portion and diversify my portfolio more. I’m well diversified in other funds, SP500, etc, etc. But I need to start diversifying outside of the market.
As I said, by selling the stock I’ve lost a potential upside and hopefully the market will continue to keep going. I’ve been calculating my retirement projections on a 7% standard return over the next XX years until my retirement. So a nice 9% t0 13% return in an investment property annually will keep me ahead of the historical average stock market return.
I have a place in mind – it’s a short walk to downtown, turn key (aka all fixed up), and in the right purchase price and a rental location, in a town that is currently being renovated. What I mean by that is, I see a lot of old houses being sold cheap that people are putting good money into for flipping purchases. This will not only improve the existing homes, but also bring up the home prices in the area. This area is under sees homes under the statewide average, so there is room to grow in valuations and I can see it happening.
If I had more ambition I could get into the lower prices homes to fix up and rent or flip, but as someone that owns a business and runs a few successful things on the side, you can only get stretched too thin before you just screw everything up.
Slow and steady is the way for me right now. Talk to me in five years and that might change.
Time for some house shopping and to find a realtor…