[WINii] Getting Real about Real Estate

Hi WINers!

This week, we're getting real…about real estate. We'll chat about renting vs. buying, the latest on mortgage rates and market values, and investing in REITs.

You'll also get a sneak peek into what it was like to start a job during COVID.

Let's get to it! 👇

👩🏻‍💻 Family, Work Ethic, and Joining Google

Reny was deeply influenced by her family, especially by her grandmother's journey. Her grandmother moved from the Dominican Republic to the U.S. with nothing. Through her determination and work ethic, she built a solid foundation for her family through real estate investing. 

Reny's older sister also was a positive influence, as she chose to enter the world of advertising…though some healthy sibling rivalry had Reny looking elsewhere at first. 😏

Reny has since been upping her game by upleveling her technical understanding, especially excited about how Gen AI will impact advertising solutions. 

Learn all about Reny's money and career journey here! ⏬

🎧 Listen on Spotify

🏡 Should I Rent or Buy?

One of the biggest #adulting dilemmas we face is whether or not we should keep renting or go all in and purchase a home. The answer isn't so cut and dry and depends a lot on your preferences and financial situation.

In today's crazy economy, both home prices and rent have outpaced wage growth in most areas. In other words, it's less expensive to be a renter. 

However, homeownership still makes sense for a number of reasons. When you own a home, you start building wealth. After your mortgage is paid, owning becomes significantly cheaper than renting over the long term. 

Although you're on the hook for that new hot water heater, you have all the freedom in the world to customize your living space. If you want to cover your walls in leopard print, go right ahead!

📈 Housing Market Update

As far as mortgage rates go, they've improved since the fall (the 30-year rate topped 8% in October). Experts predict a modest decline in rates through 2024. 

We should also keep a close eye on the Federal Reserve. If they announce another rate cut, it'll likely translate to lower mortgage rates and a bit of relief for homebuyers.

When it comes to home prices, according to the NAR, the national median price for existing homes sold in January was $379,100, up 5.1% from January 2023. 

Even though housing prices continue to increase, the demand still outpaces supply. In other words, be ready to go toe to toe with some competition when making an offer.

🏘️ The Deets on REITs

Looking to invest in real estate without buying actual property? Yep, there's a way! 😎

Real estate investment trusts (or REITs) are investment securities where you invest in revenue-generating real estate without purchasing or managing properties directly. Some REITs are publicly traded on stock exchanges. 

REITs can be made up of different sectors of real estate, like apartments, hotels, warehouses, malls, and even self-storage facilities. The best REITs come with big payouts, but like other investments, they don't come without risks. 

Investors love REITs because of their steady dividends. Their structure requires them to pay 90% of their annual income as shareholder dividends, which means they offer some of the highest yields in the stock market. These high dividends also make them less volatile than some other asset classes. 

REIT Tax Tip: 

While you shouldn't make investment decisions solely based on taxes, REITS could provide you with additional tax optimization, based on where you park your fund.

Thanks to the Tax Cuts and Jobs Act of 2017 (TCJA), you can get a 20% deduction on qualified income, which includes REITs. Because they typically pay substantial distributions, a more tax-sensitive investor would want to place REITs in a tax-advantaged account.

The above provision of the TCJA is set to expire at the end of 2025, so REITs may become a less tax friendly investment. If that happens, then placing REITs in tax-advantaged accounts would make even more sense.

Next WINii podcast guest?

Is there an exceptional female colleague, mentor, or C suite in tech that you admire? Would you like to see her on WINii’s podcast? If so, who is she and what’s one burning question you would ask?

Send your feedback here! 👇

Have a wonderful week ahead!

Minki
Founder, WINii
Empowering a million women to become millionaires

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