Jennet Kresge

At Home In Santa Cruz

Jennet Kresge

At Home In Santa Cruz

Team Strock, eXp Realty of California, Inc.


The Top 2 Favorite Investment Strategies for Locals

I hope you’ve been enjoying this investing in real estate series.  One of the most important things I’ve learned as a real estate agent is the wealth building power real estate can provide. 

I’ve helped clients make all sorts of real estate investments over the last twenty years and seen investment strategies change as their financial situations and personal lives have changed too. 

Of course, it’s a good idea to diversify your investment portfolio and you should speak with a certified financial planner about how to do that. 

When it comes to real estate, there are many ways you can invest, and today I want to share 2 of the local favorites. 

Buying a Vacation Property

Do you love heading to the beach every summer?  Do the mountains call you every winter that you find yourself going to a certain ski town every chance you get? 

Well, then you might want to consider buying a property out of town where YOU like to go and renting it out when you aren’t there.

What I’m suggesting is NOT a second home, but essentially a vacation rental property that you rent out to others most of the time and that you get to use a few weeks and weekends a year too. 

Nowadays with short term rental apps like VRBO, Air B & B and even longer term “corporate” rental companies like Zeus and Sonder, short term rentals can be a great option for how you invest in real estate.

What I love about investing in a vacation property is not only can you potentially get a great return on your investment, but you can also enjoy the property too!

Make money and have a fun vacation?  Yes please!  

There are some tax advantages to having a vacation property be an investment property instead of being a second home, so be sure to talk to a good accountant who can explain the difference and the rules.

Moving and Keeping Your Current Home as a Rental Property

If I had to pick just ONE real estate investment to do, this would be the one. This is the investment strategy that I’ve seen used the most over the years. 

Here’s how it works:

As our life changes, so must our homes.  Gone are the days when we buy one home we own forever. 

So, when it comes time to move, keep the home you have as a rental property and then move on to your next home.

At first glance, you might be thinking, “Don’t I need the money from my current home to buy my next home?” 

Maybe, but maybe not. When you are ready to move from your current home, it’s important to talk to your team of advisors – me, your loan officer, and financial planner.  Together we can look at your financial situation and the financing options available to you and provide our best recommendation. 

This strategy could be more possible for you than you think and it’s worth looking into.

Here’s why it’s such a great strategy:

When we buy a home we are going to move into, not only do lenders require less down, but the interest rate is lower than if you were to buy an investment property you’ll never live in. 

So, you’ll save on both down payment and the interest rate when you buy a home you plan on moving into, and then when it’s time to move, keeping it and turning it into a rental. 

While it’s a rental, you get the standard benefits of having an investment property – tax advantages, someone else paying down your mortgage and equity gain. 

A word of caution – there are lender rules about how long you must live in a property and your intentions when you buy it.  Don’t commit loan fraud by saying you are going to live in a property for a long time to come if that’s not your intention.  I’m suggesting that you buy a home with every intention of living there and loving it for years to come, but when it comes time to move – 3 or even 10 years from now, investigate how you can keep it, rent it and move on to your next home all at the same time.

If you or anyone you know has been thinking about wanting to invest in real estate, I’d love to help.  There are so many great ways to add real estate to your investment portfolio depending on your goals and financial situation.  Schedule a time to talk here and let’s make it happen.

At Home In Santa Cruz Blog

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I believe that with Information, Preparation, and Strategy, you can achieve great success. Let me show you how!

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Hi, there!

I believe that with Information, Preparation, and Strategy, you can achieve great success. Let me show you how!

Schedule a time to talk

How I Help Buyers

How I Help Sellers

Stuff You Should Know