There is one statement about investments that is indisputable. If an asset does not earn a sufficient, regular cash return to its owner, it’s a speculation.
By definition it's not a true investment.
Investments are vehicles that earn their keep. The hope of capital gain, without sufficient regular cash return, is speculation.
Gold and other precious metals are 100% speculations. They don’t work for the investor. They generate no income.
They are market driven, and profit and loss are determined by what people are willing to pay for them.
Currently, properly investing in for-lease residential real estate is an excellent investment vehicle. It fits the definition of an investment.
And since successfully picking and managing residential real estate is formula driven, a hand calculator, a legal pad and pencil, and a mind that doesn’t let "cute" overcome good business reasoning, can easily drive your success.
One interesting and clever investment avenue is buying large, older and historic homes and converting them into duplexes, tri-plexes, sometimes even four-plexes.
And often an additional unit can be added above the garage.
In years past, I converted a number of homes in Galveston’s East End Historic District into apartments. Since the area is adjacent to the University of Texas Medical School, they were in the perfect market.
These clever units commanded higher rents than those in conventional garden apartments, had very low vacancies, and always led the market in appreciation.
The net rents brought a fine and consistent rate of return.
If you are interested in this investment avenue, perhaps I can help you find and select the perfect Dallas properties. Call me.
BILL CHERRY, REAL ESTATE BROKER
Dallas – Park Cities