You have heard this before; location, location, location and another one is, buy real estate and hold. I have a very savvy client that has been purchasing homes over the years for his children here in Newport to hold for the future. A duplex or two bought at the beach, (of course with short term rental permits) that checks all of the boxes. This way, as the children age, they have a home here in Newport that was bought at a price years ago, to enable them to afford to live in Newport in the future. For him, it is cash flow positive while it is rented and it continues to gain equity over the years as the children age.
But let’s go further; what about location? A Bayfront is always a good idea; we know they are not making more waterfront lots. With his dreams of living on the water ‘some day’, but not necessarily today, he picked up a home with a dock on the water a few years back. He figured prices are only going to keep going up and why not secure a home now. This way, he could buy a piece of Newport on the water, at a lower price than in the future, once he decides to finally make the move down the road. While the home gains equity, the rental income covers more than the yearly cost, and it turns out a great profit yearly.
This property was purchased about three years ago and has already gained about 25% in equity. Purchased in the low $3’s and now worth in the mid $4’s, I would say that was a great investment. If you’re looking at ways to build your portfolio for your children and your legacy for the future, this is a great way to start. See you again soon on the Duffy.
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