Despite their importance to the global economy, women still face a number of obstacles to financial success. As an example, women in the United States earn just 82 cents for every dollar earned by men. In addition, women are more likely than men to live in poverty — especially in their later years.
In addition to gender discrimination and unequal pay, there is a lack of financial education and resources that contribute to these disparities.
In recent decades, however, women have radically changed the investing landscape, as noted by Bankrate. Despite the stereotype that most investors are men, women are becoming wealthier and are investing more.
Women investors are on the rise. According to a study by Fidelity published in 2021, 67 percent of women now invest outside of their retirement accounts. This number was just 44 percent in 2018.
Among those who know this all too well is Tamar Hermes.
As a child, Tamar grew up in poverty, but now she’s an entrepreneur and an investor who is worth millions of dollars.
Her company Wealth Building Concierge empowers women to invest in real estate in order to become financially free.
Her focus is on appreciation through buying and holding single-family homes and duplexes in Los Angeles for over 20 years. As part of her recent expansion, she now owns passive multifamily properties in multiple states, is involved in private lending, and operates AirBnB properties.
Through her business, The Wealth Building Concierge, Tamar creates opportunities for wealth. She is also the author of the book, The Millionairess Mentality: A Professional Woman’s Guide to Building Wealth Through Real Estate. In case you didn’t know, all proceeds from the sale of her book go towards the Mona Foundation, a charity that educates girls and promotes gender equality worldwide.
As such, let’s explore how determination, passion, and diligence can be used to create anything from nothing in this blog post.
Can real estate cash flow cover your lifestyle income and fit into your overall financial plan?
After all expenses are taken care of, real estate cash flow is how much money you earn from your rental properties. In addition to mortgage payments, property taxes, insurance, and maintenance, these costs are also included.
Your overall financial portfolio can benefit from real estate cash flow, which helps cover your lifestyle income. It can work in the following ways:
- Cover your living expenses. You can use the income from your rental properties to cover your living expenses, such as your mortgage, utilities, and food, once you have a portfolio of rental properties. You can use this income for other purposes, such as saving for retirement or investing.
- Provide a supplement to your retirement income. Real estate cash flow can supplement your retirement income if you are retired or semi-retired. If you do this, you will be able to maintain your standard of living, and you will not have to rely solely on Social Security or other government benefits.
- Diversify your portfolio. As a different asset class than stocks or bonds, real estate can help diversify your overall portfolio. Over time, this will reduce your overall risk and assist you in reaching your financial goals.
What Tamar likes most about real estate is that she can understand it. “I can understand, okay, I’m going to buy it for this price,” she explains. She also knows what to expect, incurred expenses if things do not go well, and what can happen in the future.
“Whereas if I’m investing in a private equity deal, then I can say, okay, this is a fantastic idea,” Tamar states. “I can see how well this company is doing. I can see the projections, I can see the massive returns that I’ll get, which will likely be more than real estate, and I can also lose all my money.”
How can real estate be such a safe investment?
Investments in real estate tend to be safe for a variety of reasons, including:
- Tangibility. Property is tangible, meaning it has a physical form. Unlike stocks and bonds, which fluctuate with the market, it is less volatile.
- Appreciation. Generally, real estate’s value increases over time. Population growth, inflation, and limited land supply are all factors contributing to this.
- Income potential. The rental income generated by real estate, for example, can provide a steady stream of income for investors
- Leverage. A small down payment can allow real estate investors to leverage properties. Their returns can be boosted, but their risk increases.
- Tax benefits. Depreciation and mortgage interest deductions are among the tax benefits available to real estate investors.
Investing always involves risk, however. Vacancy rates, maintenance costs, and legal liability are other risks associated with real estate ownership.
“I just think that we have a lot of options that even if something goes south, we have ways, we have a myriad of ways that you can stay in control with real estate,” states Tamar.
“And it does seem that over time, though, that time can also take care of a lot of the issues as long as you’re still getting rents and can muddle through the challenging times which we’re likely looking at ahead,” she adds.
Real estate investing: how to avoid losing money.
You can build wealth by investing in real estate. However, you should be aware of the risks involved.
As a real estate investor, you can avoid losing money by following these tips:
- Do your research. There is probably no better tip than this. The market, neighborhood, and property itself must be understood before investing in a property. Understanding the local rental market and getting comps from comparable properties are essential.
- Don’t overpay. If possible, purchase a property below market value. In case of a market downturn or unexpected expenses, you’ll have a cushion.
- Have a plan. You should have a clear plan before you buy a property. Rent collection, repairs, and a maintenance budget are all part of this plan.
- Be patient. Investing in real estate takes time. Don’t expect to get rich fast. Building an income and appreciation-generating portfolio is a better strategy.
- Be prepared for unexpected expenses. With real estate, things don’t always go as planned. The financial cushion you have in place can help you cover unforeseen expenses, such as repairs or vacancies
Investing for appreciation rather than cash flow has its own risks.
When you invest for appreciation, you hope that their value will increase over time. Long-term investing can grow your wealth, but there are risks to consider.
You could lose money when investing for appreciation. An asset’s value doesn’t guarantee that it will rise, and even if it does, it won’t rise at a pace that is faster than inflation. It is even possible to lose value over time.
Another risk of investing for appreciation? Returns may take a long time to appear. Some assets, like real estate, take years to appreciate. So, you might not be able to access your money when you need it, so be prepared for that.
Furthermore, if you’re investing for appreciation, you may experience greater volatility than if you’re investing for cash flow. In other words, the value of your investment can fluctuate greatly over time. This can be frustrating for some investors, and it can also make it harder for them to plan for the future
The initial cash flow you have from a property may not be as high as you’d like because you’re rehabbing it or you need to take care of other things to make the rents increase, Tamar says. You may not make as much at the beginning, but after a few years, things could improve. “And that’s also a really helpful way to look at it over time,” she points out.
Creating wealth for women through real estate.
The real estate market can be a great source of wealth building. For women to succeed in this field, they need access to resources and education.
- Education. Making informed decisions and building wealth can be possible for women with the right education and resources. Taking workshops, seminars, or online classes can help.
- Access to capital. Capital barriers often prevent women from investing in real estate. Capital is available through a number of organizations, such as Women Who Invest and the National Association of Women Business Owners.
- Networking. Women can benefit from networking with each other and sharing resources, as well as building a supportive community. The Women’s Real Estate Network and the National Association of Real Estate Brokers are two examples of women’s real estate investment groups and networks.
Tamar is also doing her part to empower women. She started Wealth Building Concierge to help clients understand the best plan for their finances by going through the process with them.
Also, she wrote a book, The Millionaire’s Mentality, that discusses why it’s okay for women to have money, and why it’s our duty to do so, she says. This book also contains The Professional Woman’s Guide to Building Wealth Through Real Estate, in which she explains how to invest in real estate.
Getting the most out of your money.
It’s important to find ways to earn money even while you’re not actively working. You can accomplish this by:
- Investing your money. The best investment option for you depends on your research, so choose wisely. The assets you can invest in include stocks, bonds, mutual funds, and real estate.
- Creating passive income streams. A passive income is money you earn without having to work for it. Passive income streams can be created in many ways, such as renting out property, starting a blog or YouTube channel, or creating and selling online courses or products.
- Starting a business. The ability to control the direction of your financial future can be gained by starting a business. A successful business requires time, effort, and money to start and run.
It’s when we understand what we’re doing with our money that we can make wise decisions,” Tamar states. “And that’s why I love real estate so much.” Tamar thinks it’s a great place to start. “And you start to realize, hey, I can do this, I can understand what I’m doing, and I can have more control over my money,” she adds.
It doesn’t feel good to work so hard, have all your money in a 401(k), and have someone else manage it for you, and you don’t understand the returns, you don’t know them, you don’t know how much they’re earning, it creates a lot of vulnerability, she says.
Featured Image Credit: Photo by Christina Morillo; Pexels; Thank you!