Low-risk investments have been offering lower and lower returns, and many fixed-income options are less than optimal in light of the anticipated increase in interest rates. The U.S. Treasury recently began offering floating rate notes in the hopes of addressing investor concerns about market volatility and the eventual rate hikes. A few fledgling ETFs based on the new federal bonds soon followed. Not surprisingly, the yield on these investments isn’t expected to make your portfolio’s day.
Despite these and other new financial products, investors are continuing to ask how they can generate a decent return on their savings. Sure, they can throw caution to the wind and invest in emerging markets or – gasp – bitcoins. The reality, however, is that the risk levels of such ventures are simply too much for many investors to stomach.
The continuing conundrum has left some relatively conservative investors wondering whether it’s time to invest in the rental market. Aggressive investors have been taking advantage of bottoming sticker prices and mortgage rates for a while now. Mortgage rates remain relatively low. Real estate prices are still depressed in many markets, and, with fewer families in a position to buy, the mainly-robust rental revenues are unlikely to plummet.
Nevertheless, an inability to find a down payment has been a bar to many who otherwise see the advantages of becoming landlords. If you have a chunk of your savings you’re just not sure how to invest, it may be time to take that leap and find a quality condo to rent out.
Even if you don’t have oodles sitting in your savings account, there are ways to find the capital you need to break in. One option is converting any annuity you may have into a liquid lump sum. For example, one type of annuity is the structured settlement, which plaintiffs in successful lawsuits often receive in lieu of a one-time payment. These annuity-type payments can provide a useful income stream, but they don’t serve very well as current investment capital.
Selling an annuity such as a structured settlement via a structured settlement loan may make particular sense when done to invest in real estate. Like structured settlements, rental properties provide an ongoing stream of income, so you can make an equity investment and yet you don’t necessarily lose the income stream you had; in fact you could increase your income stream. Yes, there is greater risk, but the chance to make your mark as a real estate mogul may be worth it. For more information on the risks and benefits of a structured settlement loan, be sure to click here.
Being a landlord is much more profitable if you can manage the property yourself. Hiring a property manager will make it a more hands-off investment but will also cut into your profits. While finding a renter may seem daunting you’ll get the hang of it quickly and there are a number of resources on-line to help you out. Remember to always do a background check and call references. Getting a stable long-term tenant will help your investment earn a consistent income that will sure be an excellent addition to your portfolio.