Lets talk about why I’m not investing in any more real estate, my thoughts on the current housing market, and how I plan to invest the rest of my money in 2021. Enjoy! Add me on Instagram: GPStephan
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My thoughts on the 2021 real estate market:
First, interest rates are at their historical all time lows, ever. Typically, this would bode REALLY well for a real estate investor like myself….
But, SECOND…that comes at a cost. Because interest rates have become so inexpensive, it’s driven up the price of real estate because – now – people can afford to spend just a little more than before, and there’s more demand to lock in a mortgage.
Third, speaking of demand – there’s a LOT of it. So much so, that it’s caused inventory to drop to its all time lowest level…also, in history.
That means, fourth – when you combine low interest rates, with low inventory, with high demand…you get a market that’s EXTREMELY difficult to find the type of deals that I’m looking to buy.
WHY I’M NOT BUYING REAL ESTATE:
For the last 10 years, I’ve invested nearly EVERYTHING I save into Real Estate, and for the longest time – that made up almost the ENTIRELY of my investment portfolio.
Even though it was VERY PROFITABLE…it’s NOT SMART to hold 90% of your net worth in real estate, in one city. It’s just too big of a risk that something COULD happen, without at least having SOMETHING ELSE to hedge that position. Something like this never really clicked when I was younger, because I was all about going after whatever made the most money…but, at a certain point, it becomes more important to PRESERVE your wealth, then CONTINUE growing it as fast as possible…and by diversifying AWAY from Real Estate, it’s given me a LOT more peace of mind that – no matter what happens – I’ll be good.
Next, another recent revelation that I’ve come to understand over the last year – is that value of my time. I’ve gotten to a point where I don’t have enough time in the day to get everything done. Even something like “hopping on a 30 minute call” has turned into a “I need o schedule this a few days in advance” because otherwise, everything else is booked up and I have to pull away from something else just to make the time. If I didn’t prioritize EVERYTHING this way, NOTHING would get done, and things would fall through the cracks…so, I now have a value for my time, and I ration it very precisely.
Because of that, I’m not able to spend the time I used to to be able to find the right deal, and manage the work myself.
For me, and – I think for MOST people – Real Estate is a PHENOMENAL TOOL for wealth CREATION. There’s no other investment that offers the opportunity to potentially DOUBLE your money, YEAR AFTER YEAR, through sourcing the right deals, fixing them up, and renting them out.
However, at a certain point – I need to take a step back, and realize that I’ve been TOO oriented around real estate, from a diversification standpoint, and it MAKES SENSE to take a more hands off, passive approach so that I have more time to focus on other endeavors.
My investments right now are all about lower risk, lower return, more diversification, and a safer allocation that allows it to continue to grow – but, at a slower, more consistent rate. It’s less stress, less work, less for me to think about, the more I can streamline my entire life – the better I can work on other things. .
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
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