In a bull market, stocks reign supreme, but the shift from highs to lows can happen in the blink of an eye. Although bonds and U.S. Treasurys can be a buffer against volatility, that safety often translates to diminished returns when interest rates rise.
So where does the middle ground between risk and reward lie? The answer is real estate. While real estate investing certainly isn’t for everyone, it can be very lucrative. Many people have made millions investing in real estate.
Are you still in doubt on why you should invest in REAL ESTATE? Here we give you eight good reasons.
Long-term real estate investments not only produce positive cash flow each month, but they also build equity. Appreciation is the second benefit of a long-term real estate investment strategy. In most markets, real estate appreciates over time. According to Zillow, real estate in the U.S. has increased in value by 6.9% year-over-year since the time of this writing. So, the $150,000 home that you purchase today could be worth $292,000 in 10 years.
Fact is, millennials are getting old, and they’re becoming like their parents. According to a survey by the National Association of Realtors, millennials’ desires for the interior of their homes also dovetails with their parents’ dreams.
You may buy a rental property purely as an investment, or a way to secure a home at current prices you can retire later. Your rental yield needs should cover your costs and give you an extra income, but the real ROI is in being able to avoid higher property prices when you retire.
Higher home prices are making house flipping harder, but still lucrative. Flipping, which is defined as buying and selling a home in the same calendar year, was popular during the housing boom when investors could get easy mortgage financing.
Historically in real estate, your risk of loss is minimized by the length of time you hold on to your property. When the market improves, so does the value of your home, and as a result, you build equity. The risk never changes in the stock market, and there are numerous factors beyond your control that can negatively impact your investment. Real estate gives you more control of your investment because your property is a tangible asset that you can leverage to capitalize on numerous revenue streams while enjoying capital appreciation.
The U.S. economic outlook is healthy according to the key economic indicators. The most critical indicator is the gross domestic product, which measures the nation’s production output. The GDP growth rate is expected to remain between the 2 percent to 3 percent ideal range. Unemployment is forecast to continue at the natural rate. There isn’t too much inflation or deflation. That’s a Goldilocks economy.
Foreign home buyers scooped up a record number of residential properties in the United States in the last year, despite a rising dollar and political uncertainty. The National Assn. of Realtors said foreigners bought 284,455 properties in the 12 months that ended March 31, about a third more than a year earlier. Dollar volume surged nearly 50% to $153 billion, also a record for the survey first taken in 2009.
The Great Recession took its toll on many households — contributing to home foreclosures, bankruptcies, and other financial disasters. Ten years after the start of the mortgage crisis, we’re looking at a very different picture. And consumers are finding their feet and ready to re-enter the homeownership club.