Monday, June 11, 2012

Balance of Power

For a very long time, our investments, and our net worth, were heavily weighted towards real estate.

But due to the real estate bust here in Florida, many of our properties lost considerable value over the last few years.  It appears that the market, maybe, has found its bottom because prices have started to inch up and housing stocks are way down.  But, our properties are filled and paying for themselves.  And by paying for themselves, that means that our tenants pay the mortgage and other costs.  That is the joy of rental property, someone else pays the mortgage.

In June of 2008, our real estate investments were valued at $460,018 (valuation less outstanding debt).  As for our retirement/investment accounts, in June 2008 they were valued at $290,145 (this is just before the market tanked in the fall of 2008).

Now, 4 years later, our real estate investments are valued at $287,810 and our retirement/investment accounts are valued at $521,634.

We have made good progress in the last few years in our retirement savings by (1) maxing out all our accounts, (2) buying some great stocks and funds at bargain prices in 2009 and 2010, (3) by taking advantage of Mr. Sam's company match.

Is it painful to lose $172,208, in 4 years, in the real estate market?  You betcha!  But really, we haven't lost that money, yet, because we have not sold any of our real estate holdings.  In the mean time the properties are filled and paying for themselves (although looks like one of our tenants will be leaving in September).  I am hopeful that the Florida real estate market has found its bottom and over the next 10 years the properties will appreciate to the point that we can make a profit.

1 comment:

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