Investing in Real Estate: A Key Strategy in Your Financial Plan

Real estate can be a powerful tool for building wealth, but like any investment, it needs to be evaluated strategically to ensure it aligns with your overall financial goals. Whether your focus is on generating cash flow, long-term appreciation, or simply diversifying beyond traditional market investments, real estate presents unique opportunities—along with its own set of risks.

When I work with clients who are considering real estate as part of their portfolio, my approach is simple: we assess the numbers, weigh the risks, and determine how a given investment fits into their broader financial picture.

How to Evaluate a Real Estate Investment Deal

Not all real estate investments are created equal, and success depends on understanding key financial factors. When analyzing a property, here are some of the primary considerations:

  • Cash Flow: Does the property generate positive monthly income after all expenses?

  • Cash-on-Cash Return: What return does the investment generate relative to the initial cash investment?

  • Appreciation Potential: How likely is the property to gain value over time?

  • Leverage & Financing Costs: How do interest rates and loan terms impact returns?

  • Market Conditions: What do local rental demand, property values, and economic trends indicate about the investment’s future?

By walking through these elements, we can determine whether a property makes sense for your financial strategy.

What is Your Required Return as a Real Estate Investor?

Every investor has a different threshold for risk and return. When deciding on a real estate investment, I work with clients to determine their required return based on:

  1. Risk Tolerance: Real estate isn’t always a smooth ride—how much volatility are you comfortable with?

  2. Investment Timeline: Are you looking for immediate cash flow or long-term appreciation?

  3. Alternative Investment Comparisons: Traditional stock market returns average 7-10% annually—does your real estate investment outpace that?

  4. Leverage and Debt Management: Higher leverage can amplify returns, but it also increases risk.

Comparing Real Estate vs. Market Investments

It’s important to compare real estate to other investment options to see how it fits into your portfolio. Here’s how real estate stacks up against traditional stock market investments:

Stock Market Investments:

  • Highly liquid (easy to buy/sell)

  • Lower capital requirements to get started

  • Passive growth through compounding

  • Subject to volatility

Real Estate Investments:

  • Generates cash flow and provides tangible assets

  • Offers tax advantages (depreciation, deductions)

  • Less liquid and often requires active management (or outsourcing management, which impacts returns)

  • Appreciation depends on location and market cycles

Neither option is inherently better—it all depends on your goals. Many investors find a combination of both stock market and real estate investments provides the best balance of growth, stability, and cash flow.

Financing Your Investment Property

Securing the right financing is just as important as finding the right property. Depending on your strategy, property type, and financial profile, there are several loan options to consider.

If you're looking to finance an investment property, I highly recommend working with Cody Begdorian, my trusted lending partner. Cody specializes in helping investors secure the best financing solutions for rental properties, multifamily units, and other real estate investments.

Click here to contact Cody:

Cody Begdorian - Mortgage Loan Advisor - Barrett Financial

For a deeper dive into different loan options, click here to get access to Cody’s

Investment Property Financing Comparison Chart

Is the “Juice Worth the Squeeze?”

Investing in real estate takes work. There’s research to be done—finding the right property, securing financing, coming up with a down payment, getting loan approval, and possibly setting up an LLC to hold the property. And that’s all before you even own it.

Once you do, the real work begins. Will you manage the property yourself, or hire a property manager? How will you handle maintenance, tenant issues, and unexpected expenses? And then there’s tax season. Even though I hire a CPA to handle my taxes, I still have to gather and organize everything—profit and loss statements, receipts, expenses, spreadsheets, the works.

By comparison, investing in the market is simple. Open an account, build a portfolio, and click a button. Sure, there’s monitoring, rebalancing, and adjusting based on changes in risk or financial goals, but overall, it requires much less effort than real estate. And if you hire a financial advisor to manage your investments, there’s even less for you to do.

So, when deciding whether to invest in real estate, the real question is: Is the juice worth the squeeze? Will the return justify the effort? Will it provide the diversification you need to meet your long-term goals?

That’s where all the research and analysis come in. When you break it down, is the investment property you’re considering truly worth the effort?

Final Thoughts: Is Real Estate the Right Move for You?

Real estate can be an excellent tool for wealth accumulation, but the key is to make sure it fits within your overall financial strategy. A well-diversified portfolio, including both real estate and market investments—can provide the right balance between growth, stability, and cash flow.

If you’re considering adding real estate to your portfolio, let’s talk. I can help you evaluate opportunities, weigh the risks, and determine the best path forward based on your unique financial goals.

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Disclosures: Investment Advisory Services are offered through Insight Asset Management. Insight Asset Management is licensed to provide these services under Panoramic Investment Advisors, a separate and affiliated entity. Investing in real estate carries risks, including market fluctuations, financing challenges, unexpected maintenance expenses, and potential changes in rental demand. Investors should carefully assess their financial situation and consult with a qualified financial professional before making investment decisions. Insight Asset Management and Panoramic Investment Advisors do not receive any compensation or incentives for referring clients to Cody Begdorian. Recommendations are based on personal experience and professional judgement.

Matthew Tuft