So there is all this talk now about the “fiscal cliff.”
Am I the only person who bemoans the near total flight of common sense from our leaders?
I cannot lecture on the economic ramifications of economic policy, but I can try to add a bit of common sense. I was raised in a relatively small, older home. My mom still lives there after 60 years. We were a family of six with four daughters and for many years a grandparent. We shared one and a half baths. We were happy; frankly, we didn’t know better. We shared. We argued.
Oh, and there was no air conditioning. We sat outside a lot on humid summer evenings. We used fans.
If anyone would listen, I would advise Washington to get off the ivory tower, to get out of the velvet slippers, and to LISTEN. Despite the final outcome, that election map looked awfully red to me. No one has a mandate. Everyone should show personal responsibility.
So where does real estate come into the picture? Common sense dictates that we need to save more. We need to look for alternative sources of income as we grow older. We need to realize that inflation is ever present and will increase. We need to diversify our assets.
In the interest of full disclosure, I am NO financial advisor, but I do have my share of brains and tend to see the world in “big picture” format. Owning a rental or two can be an interesting addition to a retirement portfolio. South Carolina property taxes nearly triple for landlords compared to owner occupants. But, Fort Mill continues to be a very desirable location. Tenants these days are often much more responsible than in the past when they could buy a house for $99 down.
People, concerned about a new job or just plain concerned, are more hesitant to commit to buying. Or they cannot buy due to an insane lending environment. Many have short sales or foreclosures in their recent past.
A wise investor may want to consider adding rental property to his or her retirement portfolio – something nice, though not flamboyant, outside city limits (keeping in mind those tripling property taxes!), always keeping the numbers in mind. Rentals add value in two ways: through appreciation and through equity buildup (someone else pays off the mortgage).
Caveats? Of course. Tenants tear up the house? Paint and carpet are relatively cheap to replace and have a huge impact. Tenant stops paying? Eviction in South Carolina is quick and easy (Google it!).
But, as social security teeters and inflation increases, rental income could add some stability.
Kathryn Miller is with Coldwell Banker. She can be reached at 517-1975.