There is one very simple reason to invest in real estate: it can have tremendous returns. Whether you choose to invest in commercial real estate (hotels, shopping malls, apartment complexes, office buildings, etc.) or housing, both afford investors unique opportunities — opportunities that cannot be matched with stocks or more traditional investments. Here are just a few:
Let’s look at some of the most compelling data: numbers. Returns on gross rent will be 4 to 5%. Additionally, “Real estate generally appreciates in value, and nationally, the average appreciation has been 5.5 percent over a 47-year period,” according to a March 21 article in The Durango Herald. “The combined rents and appreciation can provide an 8 to 10% return over time.” Add the advantage of depreciating real estate improvements for up to 27.5 years, and there are quite a few numbers that suggest investing in real estate is a smart idea.
It’s A Strong Diversification Opportunity
Real estate investments give you the unparalleled opportunity to invest in something that will not have the same ups and downs as other popular investment options, like stocks and bonds. Of course, it is always wise to diversify your investment portfolio, whether that means investing in stocks, bonds, business real estate, housing, etc. Housing values and returns are not directly related to stocks, giving you the peace of mind that comes with a comprehensive investment profile.
With Real Estate Investments, You’re In It For The Long Haul — And That’s A Good Thing
It’s not exactly news that there is something of a looming retirement crisis. Many Americans won’t be able to retire at the traditional age of 65, and part of that is due to a lack of savings. Even if you aren’t exactly responsible about putting aside money for retirement, owning and maintaining real estate investments over the years will guarantee you a certain amount of cash over the long-term — a guarantee that is very important when retirement rolls around.
There are a lot of perks to investing in real estate, whether you opt for investments in housing or retail stores. Choose real estate investment for its solid appreciation and returns, the opportunity to diversify your investments, and the promise of at least some guaranteed retirement income.