This blog post may contain references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services.
Real estate is one of the best ways to invest your money. It has grown popular in recent times. One of its popularity is that it is a lot less technical than investing in stocks, bonds, or mutual funds. However, you should still do an appropriate amount of research before stepping foot in the industry. Otherwise, you risk losing your hard-earned money.
In addition to this, you need to have a will and estate plan to protect your assets. In this way, you can protect your family from financial ruin after you are gone.
To help you, we will talk about the benefits of having a will and estate plan. We will also discuss things you should consider before investing in real estate.
Let’s get right into it.
Benefits of Having a Will and Estate Plan
Protect Your Family
As mentioned before, having a will and estate plan can help protect your family from financial ruin. Without it, your family will not get what they deserve. It will most likely take months or even years before they can get anything. And even then, they might not have enough to pay the bills and manage other expenses.
Protect Your Children
What does an estate plan have to do with protecting your children? Well, for starters, it is not just about handling your assets. It also handles matters like potential guardians in case both parents die. So, unless you want the courts to decide who gets to raise your children, we suggest drawing up an estate plan with your lawyer.
You can draw up an estate plan by yourself. However, we recommend hiring lawyers specializing in will and estate planning so that you can cover all bases.
Get the Assets to Your Family Quickly
Having an estate plan in place can help get your family control of the assets quickly. In this way, they can avoid going to court to get control of what is rightfully theirs. They will also avoid having to pay exorbitant fees to lawyers. According to Investopedia, distribution for estates can easily cost between 3 percent to 7 percent. For even the most modest estates, distribution can cost tens of thousands of dollars.
Also, your family will have to pay for your funeral, which can also cost a fortune. On top of this, they will have to pay your medical bills and day-to-day expenses, which can stress your family out in an already difficult time. So, why put them through all that? You can make it easier for them by having an estate plan.
With that said, let’s talk about things you should consider before you invest in real estate.
Things to Consider Before Investing in Real Estate
As you most likely know, real estate is a costly business. So, before you invest in any properties, take the time to research critical factors like maintenance and yearly upkeep costs, upgrade costs, utility expenses, and taxes.
You will have to do maintenance now and then to keep your properties tip-top shape. Otherwise, they will degrade over time which can hurt your investment. In addition to this, you will have to do yearly upkeep to keep your properties in mint condition.
Furthermore, you will have to pay for the utilities like electricity, water, and gas (if you have gas stoves). Also, if you are looking to flip your properties, you will have to make upgrades. Upgrades can include interior and exterior remodeling. Lastly, you will have to pay state taxes on all your properties.
Choose the Right Location
Where you invest is a critical factor that decides whether your investment will be a success or not. Look beyond the price tag. Just because property costs less does not mean it is ideal for you.
If you want to invest in residential properties, consider important factors like the community and the living standard. In addition, find out how close the property is to hospitals, airports, stores, local touring sites, etc.
Also, if you are considering investing in commercial properties, make sure to research the area’s population and demographics and if parking is available or not.
Understand Your Responsibilities as a Landlord
While it is nice to collect rent money every month, you also need to fulfill your responsibilities as a landlord. Failure to do so can land you in legal trouble, which will cost a lot of money. Also, it is bad press, and word of mouth spreads pretty quickly. You do not want to be known as a landlord who does not provide their tenants with suitable living conditions. It will hurt your chances of landing new clients.
Some of the most common responsibilities for a landlord in California include:
- Meeting all health and building codes.
- Giving a 24-hour notice before entering the rentees premises.
- Making timely repairs.
- Removing any disruptions to ensure peace.
- Creating a legal lease document and enforcing it.
- Treating your tenants fairly as per the Federal Fair Housing Law.
- Complying with all terms in the lease.
- If evicting the rentees, follow the appropriate eviction procedures as written in the state’s statutes.
There you have it. You now know the benefits of having a will and an estate plan. You also know the most crucial factors to consider before investing in real estate in California. With these tips, you are less likely to lose your hard-earned money.
Become an Insider
Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned and has not been endorsed by any of these entities. Opinions expressed here are author's alone
The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur.