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Question for the Money Doctors

Question submitted on Jul 28, 2021.

Question

I am 65 years old, and close to retirement. I have just inherited a little over $150,000 in cash, as well as an IRA account with $35,000. I need some direction. I am considering an investment with the cash, and had in mind a storage facility or real estate vacation rental property. Advice?

Answer

Thanks for the question.  If you have experience with real estate rental properties or storage facilities and you understand the cash flow and tax consequences and benefits of these investments, then all the best.  However, if you never invested or worked in any of these areas, then I would advise against it.  Too often investors hear about the benefits (tax and otherwise) of real estate investments.  And that is true but if you don't understand how to manage these properties, it could be an expensive lesson. 

Many investment companies provide exposure to real estate through real estate investment trusts (REITs).  These funds are managed by professionals that have many years experience in that field.  If you really like real estate but don't have the experience to manage it properly, this may be a good alternative.   


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