Get Ready for College

Get Ready for College

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One of the important things as a parent is to plan for their children’s education. Let’s look at two different approaches: a savings account or investing in rental real estate.

Assuming your child is five years old and you start putting $250 a month in a savings account earning 2%, in 13 years you’d have $44,497.41 to pay for their college. Anticipating that isn’t going to be enough, you’d have to save $500 a month to end up with $88,995.

Another way would be to make a lump sum contribution of $20,000 today in a mutual fund earning 5% that would be worth $37,713 in 13 years. You’d have to make a $47,196 initial contribution to end up with the same $88,995.

An alternative to savings would be to invest in a $100,000 home in a good area. Assuming a three percent appreciation and rent of $1,000 a month, an initial investment of $23,500 could have a future wealth position of $83,838 at the end of 13 years.

Obviously, this is just an example of why rental homes are the IDEAL investment providing Income, Depreciation, Equity build-up, Appreciation and Leverage. While rentals certainly have more risk and management than a savings account, they do provide an opportunity for a higher rate of return.

If you’re concerned about paying for college tuition in the future, it is certainly worth investigating the possibility of investing in rental homes today.

If you would like a detailed list of investment properties in Ukiah, Willits, Cloverdale or anywhere else in Mendocino County, Sonoma County or Lake County, just ask. There’s no cost or obligation, just the information you want when you want it. Click Here to Sign Up!

Til next time… May all your deals be easy ones!
Follow me on Twitter @yourmendorealty

Clint Hanks                                   707-391-6000

Retirees Hit the Road: But Is Something Missing?

Retirees Hit the Road: But Is Something Missing? 

We all have retirement fantasies: Exotic places, sun all year round, and relaxation, relaxation, relaxation. It may not be a fantasy. Many retirees are now living the life of leisure … on the road.

U.S. Department of Commerce statistics reported in a recent article in the New York Times show that from 1993 to 2012, the number of traveling retirees grew from 9.7 to 13 percent. And Social Security Benefits to more than 350,000 Americans were sent to foreign addresses in 2013 – almost 50 percent more than in 2003.

Call them senior gypsies or the new explorers, many retirees are selling their homes and belongings, and taking to the road unencumbered by stuff.

Right now, baby boomers (born between 1946 and 1964) make up almost 25 percent of the population; many in this group are hitting retirement age in ways many experts didn’t envision: By fleeing the good life they worked so hard to build.

Take Lynne and Tim Martin, for example. As highlighted in the New York Times article and others, this couple (ages 73 and 68, respectively) have been traveling the world since 2010, living in rentals and chronicling their adventures on their website, Home Free Adventures.

As Lynne told Yahoo Finance writer Mandi Woodruff: “We looked very carefully at what our overhead was living in California, and what it cost us to wake up every morning in our house. We added everything together, and it was staggering.”

The result was a nomadic lifestyle that seems to suit the Martins perfectly. But it’s not for everyone.

From time immemorial, man has sought that place called home. For most of us, a sailboat or RV doesn’t qualify.

So consider whether you’ll miss those family Christmases, your garden, or the grand kids’ school plays. And when you find yourself craving a change, try tapping into the equity in your home, downsizing, and earmarking “Big Money” for travel and relaxation.

If you would like to receive a free evaluation of your home’s market value Click Here!

Til next time… May all your deals be easy ones!
Follow me on Twitter @yourmendorealty

Clint Hanks                                   707-391-6000