Purchasing real estate to diversify your investment portfolio is certainly no new concept, but the FIRE Movement is sparking a whole new generation of real estate investors.
What Is The FIRE Movement?
FIRE is short for “financial independence, retire early”. It’s a method of extreme savings, maximized budgeting, and strategic investments designed to empower you to fully or partially retire in your 30s or 40s. There are many ways to go about achieving FIRE, with investing in real estate being a popular stream of residual income.
Strategy Is A Must
When it comes to FIRE, a sound strategy is a must. While all investments carry some amount of risk, the goal is to take a moderate real estate risk. In other words, this is not about overextending yourself or seeking out group real estate investments. For most, it means buying a building well-within their budget, or one property at a time as your budget allows. When it comes to FIRE investments:
- Consider properties in cities and states outside of your current market.
- Look for multi-resident commercial and residential rentals.
- Ensure you can recoup at least5% of the purchase price on a monthly basis.
- Utilize the 50% Rule, in which you set aside 50 percent of your monthly profits for property taxes, insurance, property management costs, maintenance and repairs, and vacancies.
- Prioritize properties that already have renters and ensure you have a cushion set aside for properties that don’t yet have full tenancy.
You Might Still Rent
Many who are working toward or have achieved FIRE invest in real estate, but continue to rent the home they live in. The reasons for this are often to downsize monthly living expenses. However, you may love your home so there is no need to sell or move. Instead, focus on paying off your home ASAP to minimize your accumulative interest—and eliminate your largest monthly bill.
Looking For A FIRE Investment Property In NoVA?
If you are looking for a FIRE investment property in Northern Virginia the real estate guides at Jerry Sardone Realty are here to assist. We can help you find an in-demand property that is within your budget, to rent or live in. To ease the stress of your new investment we can manage your residential and commercial real estate with full compliance of the local Landlord and Tenant Laws. Reach out today to learn more!