Helping Clients Tiptoe Back Into Real Estate
As real estate markets across the U.S. recover from their long swoon, homeowners’ sighs of relief are practically audible. Financial advisors, meanwhile, are again fielding requests from clients to put real estate back into their portfolios for diversification. Naturally, experts are trying to find techniques that might protect investors against even a partial repeat of the 2008 disaster.
Some advisors recommend sticking close to home when investing in real estate. Richard Spillane of Spillane Money Management in Woburn, Mass., which has $12 million in assets under management, says his clients buy apartment buildings or two-family homes in neighborhoods they know well, partly for the cash flow from rentals and partly for diversification. They like properties “they can get their arms around, literally,” he says.
And Elke Mariotti, a CFP and an agent with Signature Premier Properties in Huntington, N.Y., who offers financial planning on a fee-only basis along with real estate guidance, says few of her clients are comfortable investing in far-off property. They prefer buying local because it’s simpler, she says.
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