If you’ve recently come into an inheritance, you may be looking for smart ways to invest that money so that it “grows” instead of “goes.” We’ve come up with some of the best ways you can spend your inheritance money.
1. Put it Toward Your Mortgage
Depending on the size of your inheritance, you may be able to put a sizeable chunk towards paying down your home mortgage. Another similar alternative is to consider refinancing your home and using the inheritance money to help with your down payment. This could lower your interest rate and your monthly payment considerably, making it a very smart choice in the long run.
2. Purchase a Property to “Flip”
That money could also be put to good use by purchasing an investment property to “flip.” This essentially involves buying a property that isn’t in great shape, working to fix it up, and then selling it for a profit. If you’re smart about the property you purchase, this could bring in a good return on your investment. And if you enjoy the process, you could use your additional funds to repeat the process, continually growing your money.
3. Purchase a Property to Rent Out
Another way to invest your money in real estate is to purchase a property with the intent to rent it out. Do some research on rental homes in your area. What are renters looking for? What locations might potential renters be interested in? How would you manage a rental property? What would you charge? Know the answers to these questions beforehand will help you make a smart investment.
4. Put it Toward Retirement
If you have any sort of savings for retirement, you can use your inheritance money to add to those savings. If your retirement plan comes from your employer-sponsored 401k, you could increase your contributions from your paycheck, using your inheritance money to make up the difference in your take-home pay. Or you could invest directly into an IRA; depending on the amount you receive, you may be able to max out your contributions for the year.
5. Pay Off Debt
This may not be a typical “investment,” but it’s really a way to invest in your future. By paying off any debts you have, you can stop making those monthly payments—and the interest payments that go along with them. It’s a very smart way to get ahead financially in the long run, even if it doesn’t seem like the most exciting option.
Receiving an inheritance can be exciting, and you might be tempted to go on a spending spree with your newfound cash. Instead, take this advice to invest your inheritance, and put that money to work for you.
Want more help deciding how to best invest in real estate? Contact Real Property Management. We help property investors manage their properties for maximum profit, so your investment can really pay off. Call Real Property Management at 480-981-7000 to find out how real estate investment can put your inheritance money to good use.