Tallahassee Realtors What’s Better: Short Sales or an Annuity?

As Tallahassee investors seek safety against a falling dollar and declining stock market, annuities are an option increasingly explored by fearful investors but are annuities all they are cracked up to be? Let’s take a few minutes to compare and contrast annuities versus short sales to see which makes the most sense.

Annuity Defined
An annuity is essentially an insurance product that pays an income for a specified period of time. In a nutshell, you hand over a lump sum and/or regular contributions to an insurance company that is able to use and invest that money in exchange for a guaranteed payment in the future.

Reward vs. Risk
The “reward” portion of an annuity is the ability to secure a reliable, steady source of income outside of your ability to work. This is one reason it is a popular option among retirees or others seeking “safety” from the prospect of outliving their ability to work without having to depend solely upon Social Security.

While superficially this sounds like a great idea, the actual reality is often not quite as advantageous as it may initially sound. This is due to several reasons including the inherent risk associated with dealing with an insurance company (indeed, nearly any company) over an extended period of time. If the near default and subsequent bail-out of AIG didn’t teach investors anything it certainly highlighted the potential for insurance companies to take on more than their ability to pay and remain solvent. While the AIG fiasco did not directly concern individual insurance contracts, the basic premise remains the same…there is a risk associated with total reliance upon a company over an extended period of time.

Unfortunately, this is not the only risk. The risk versus reward ratio in terms of actual returns falls short especially given the ultra-low interest rates in the current market. For example, consider the following example where you invest $100,000 into an annuity paying an annual interest rate of 5% for 30 years (roughly the same period of time you would finance an average mortgage). Annuity Payments ($ / Year). The annuity would pay roughly $6,200 per year or just over $500 per month for placing $100,000 in cash at their disposal. At the end of 30 years you would have zero remaining – nada, nothing, zilch. Unfortunately, during that same period of time, the $6,200 would have lost value due to inflation; in fact, if inflation follows a historic average, that same $6,200 annually would be worth just about $2,000 in purchasing power.

Now, Tallahassee real estate agents, let’s see what happens if you were to purchase just one Tallahassee short sale property for $100,000 cash. You rent it out for 30 years and make the exact same $500 per month or $6,200 (remember, No mortgage!) plus you have tax write-off’s for depreciation. For 30 years you collect the same amount of money but at the end of 30 years instead of the payment stopping leaving you with absolute nothing…you still own a Tallahassee paid-in-full, income generating property. Since Tallahassee real estate tends to keep pace with inflation, that same $100,000 property will be worth roughly $300,000 using standard historical estimates. Now, ask yourself one simple question…which would you rather own in 30 years? An annuity controlled by someone other than yourself that leaves you empty handed or a paid-in-full property that continues to generate income as long as you own it? Call us crazy but seems like short sale real estate is a clear winner.

See you at the top!


Tallahassee RealEstate Updates:


Buying a house is the last thing on the minds of many as the economic recession appears to be in full force. However, there are also many smart investors that are jumping into the Real Estate Market. The truth is, now truly is the best time to BUY!

Tallahassee Foreclosures have been weighed down with the negative connotation of the housing markets downward spiral, however, a housing market that has crashed becomes a BUYERS Market which means buyers can find homes at record low prices!! That means there is ample opportunity to buy Tallahassee Properties at an extremely discounted price!! Not to mention banks are running Tallahassee sale specials in order to encourage wary buyers to make the best investment, in a Tallahassee property, they can make during these economic times.


If that is not enough to convince you to buy, perhaps, you have a child in college that needs to rent a place to live. Did you know you can save thousands by renting out townhomes in Tallahassee as opposed to paying ludicrous University housing fees? Tallahassee rental property rates are among the most fairly priced properties in the United States. Don’t want to take my word for it, check for yourself. Tallahassee rentals including a townhouse or Tallahassee condos (Tallahassee condominiums) are simply great temporary investments for those that are not ready to buy and would like to rent at a fair price.


Because it is currently a Buyer’s market, people looking to sell their home are encouraged to seek the help of a Tallahassee Realtor. By employing a Tallahassee realty company to sell your home, you will actually make a significantly higher profit than if you were to venture into the housing market on your own. Anxious by the state of the economy, most home buyers are entrusting Tallahassee realtors to help them find a home at a great price. If you have employed a realtor to help you sell your home that means your home will be getting much more exposure than if you simply submitted it into Tallahassee listings. No need to be weary though, just because it is a buyer’s market doesn’t mean your home can’t sell for its highest worth!!

You Are Not Alone

If the prospect of venturing into the housing market is still providing unneeded stress, feel free to contact the trusted professionals at Pro Players Realty in Tallahassee, FL. At Pro Players there is no pressure to buy or sell, your needs are a top priority, and if it is not in your best interests to buy or sell we will not hesitate to let you know. Get the Power of Pro Players Realty on your side, we’re here to help! Pro Players also offers a free home warranty or free home inspection value to $450 for all buyers and sellers.

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