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Strategies & Market Trends : Retirement - Now what? -- Ignore unavailable to you. Want to Upgrade?

To: Drygulch Dan who wrote (98)	3/31/2005 1:43:00 AM
From: B.K.Myers	Respond to of 288

I agree that Real Estate can have both growth and income aspects. In that case you could allocate a portion of its value as being a growth investment and a portion of it as an income investment. One simple way to determine how to apportion it would be to look at your real estate tax assessment. Since houses generally depreciate but land doesn’t, you could consider the land portion to be your growth investment and the house portion to be your income investment. Let’s say that you have property valued at $1M. If the real estate tax assessment says that 80 percent of the tax base is for structures and 20 percent is for the land, then you could apportion $800K (80%) toward your income investments and the remain $200K toward your growth investments. I also agree that idle cash should be put somewhere that preserves its value until a suitable alternative investment is found. I was lucky enough to find a real estate banking partnership that makes large short term loans at a very high interest rate (usually 16%+) and pays its investors (partners) 8%+ interest. I can withdraw my funds at any time with 5 days notice so I get a good rate of return and still have access to my money. I have found them to be a nice place to “park” my funds until I find other suitable investments. Again, a financial advisor can often suggest investment alternatives that many of us aren’t aware of. Ps. It’s nice to see that you are serious about developing a retire plan for your future. Too many people don’t take retirement planning seriously until their options become too limited. I wish you the best of luck with your retirement planning. B.K.