At least at the beginning, St. Cloud real estate doesn’t automatically find its way into many retirement plans because hands-on investments aren’t among the simplest ways to invest. For youthful investors, building a sturdy retirement portfolio is a new endeavor—and it is much simpler to earmark a regular amount to be automatically invested at regular intervals. A mutual fund or other favored asset that can grow at a pace the market determines is easy to start and easy to monitor—it doesn’t require much attention.

Yet it is worth reviewing why it’s so widely held that some real estate investments can play such a valuable role when they are made early on. St. Cloud residential real estate—for instance, a property that can become a rental house—may require a greater commitment than other single elements of typical plans, yet the reasons why new investors can find it well worth that and the effort involved are substantial, especially in these times:

·         Rental properties are noteworthy for their inflation-fighting properties. No matter how under or out of control inflation becomes, consumers still have to adjust their budgets to whatever it takes to “pay the rent.” That’s why, in the cautious lexicon of investment managers, “Real estate can be an asset class with high returns...usually offering a hedge against inflation.”

·         Famed investment champ Warren Buffet is famous for his book, The Snowball Effect, which is a detailed how-to describing the advantage of “a long runway.” That is Buffet’s metaphor for starting early to give a small investment enough time to grow, just as gravity turns a downhill-rolling snowball into a massive snow boulder. Buffet may concentrate on reinvesting in income-producing securities, but that’s exactly what a rental income property strategy is designed to produce. The longer “the runway,” the more pronounced the result—so those who act in their 20s and 30s can create significant cash flow ahead of their peers. Many a comfortable retiree would agree.

·          U.S.News.com recognized the ‘hands-on’ aspect last November in an article that promoted real estate to fund retirement. It emphasizes the importance of recognizing and accounting for the risk factors as well as cautioning that it is a strategy for those who will “do your research upfront” in conjunction with their overall investment plan. The authors listed five ways to generate passive real estate income to fund retirement. You don’t have to agree that Number One should be “rent your residence” to see the commonsense wisdom of “purchase rental property” and “sell properties.”

For anyone recognizing the potential that St. Cloud real estate can offer retirement planners, the importance of thoroughly investigating the market is vital. Helping with that quarter is where I come it. To tap into the valuable perspective that only years of experience can provide, you need only give me a call!       

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

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Saint Cloud 320-259-4554

Princeton 320-983-3555

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Minneapolis 763-565-2000

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Litchfield 320-298-1140

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