WASHINGTON — While it may seem crazy to bet on real estate for a steady retirement income these days, that is exactly what Edward and Olivia Green of Manassas, Va., are doing.
With their golden years fast approaching — he is 64 and she is 60 — the husband and wife have snapped up five investment homes in the past three years. They hope to buy more as the struggling real estate market continues to produce cheap properties.
Their portfolio includes a condominium apartment in Manassas; two houses in Prince William County, Va.; and two houses in Memphis, Tenn. Their goal is to buy cheap foreclosure properties, fix them up and rent them out.
Buyers such as the Greens seeking long-term cash flow from their holdings are emerging as the new investors of the bust.
In many ways, they are reclaiming the term “investor” from the speculators who bought homes during the boom years with intentions to flip them for quick gains.
“At the peak of the bubble, you had a lot of people who called themselves investors but were really only buying a property with the hopes of selling it at a higher price to a greater fool later,” said Michael Larson, a real estate and interest- rate analyst at Weiss Research in Florida.
“The long-term way to invest in real estate is to buy cheap and buy at a level where it is profitable to rent; traditionally, anything you got from appreciation was icing on the cake, not the cake itself.”
Michael McNally, an information technology manager from Chantilly, Va., last month paid $53,000 for a three-bedroom, 2 1/2-bath house. To make the purchase, he cashed in a $60,000 certificate of deposit that was earning interest at about 3 percent, he said.
Danielle Babb, a real estate investor and a co-author of the book “Finding Foreclosures,” said she has been approached in recent weeks by many people looking for such properties.
