Why Now May Be the Time to Start Investing in Real Estate

by | Sep 17, 2020 | Real Estate

If you’ve considered diving into the world of real estate investments, now may be the perfect time to start. There are many options to fit your comfort level and plenty of opportunities if you know where to look. These days, you can lock in a low rate and potentially bring in extra income. Why wait? If you’re not sure where to begin, here are some tips to help.

Is Real Estate a Good Investment Choice for Me?

If you want to start investing it is best to have a clear picture of your finances, long-term goals, and what interests you most. Often, the Stock Market is the first thing to come to mind for investing. But Real Estate still stands as the number one investment you can make today. In a study conducted by Gallup earlier this year, 35 percent of Americans said that Real Estate was the best long-term investment.

Purchasing your primary home, a secondary or vacation home, or investment property are great options. A home can appreciate over time while an investment property has much room for cash flow. Though it may be more expensive upfront than with stock, the long-term return of investment (ROI) can mean more cash in your pocket and a secure financial future. Forbes Real Estate Council describes Real Estate Investment as:

“Low-risk, high-return investment when held long-term. Real estate hedges against inflation but has a high entry cost and can’t be sold quickly.”

“…it’s a useful portfolio diversification tool. Real estate offers a slow, predictable rate of return over the long run and can be a great way to build long-term wealth.”

If you’re not sure what’s best for you, give the office a call, and let’s explore your investment style.

Homeownership is Growing

Why is homeownership in the U.S. so important? According to Freddie Mac, the housing market is a major driving force for the economy. Homeowners contribute and add value to a community, therefore supplying the economy on a national level. The homeownership rate in the U.S. has grown to 67.9 percent in the second quarter of 2020. A 2.6 percent increase from the first quarter of the year — even with the coronavirus pandemic. New homeowners were driven by the low-interest rates and the consistent recovery of a strong housing market. Owning a home has always been a part of the American Dream. And now, after so many months spent indoors this year, the concept of “home” has shifted in meaning for consumers: the need for a home is not just a dream but will always be essential.

If you’re interested in becoming a homeowner in 2020, it may be time to talk to my team of real estate professionals.

Why is 2020 a Good Year to Invest in Real Estate?

If you’ve been following Real Estate trends at all this year, you’ll be familiar with the terms “low inventory” and “high demand”. The limited supply of available homes has been a commonality in the industry for the last few years. But now more than ever, buyer demand is at a high. Bankrate discusses: ‘historic low rates make purchasing very appealing. Low rates give more buying power for consumers and additional properties become more affordable. On the other hand, sellers can raise their asking price to capitalize on the value these low rates can bring.’

Certain indicators can assure your decision to invest specifically in real estate. The stock market, for instance, has a higher volatile risk factor. We’ve recently seen the ups and downs that can happen within days or even hours. The Real Estate market has a stronger resilience and home prices tend to stay more consistent. Despite the effects of a pandemic or other unforeseen economic factors, Real Estate holds less risk in the long run. Owning property can be the core of building a passive income.

What are My Options?

There are many Real Estate investment options to add to your portfolio. Here are a few to research:

• Real-estate Investment Trust (REIT)
• Rental Property
• House-hacking
• Flipping Property
• Short-Term Room Rentals
• Real Estate Funds
• Online Real Estate Investing
• Private Equity Funds

One size does not fit all, so make sure you explore to find what will work best for you and your lifestyle. If you have any questions, feel free to reach out for more information.

Is Real Estate Investment right for you? Ask yourself:
  1. Am I financially prepared to support this investment?
  2. Is the property in a strong market?
  3. Will this investment bring a positive ROI and or value appreciation over time?
  4. Do I have enough resources?
  5. Should I hire a real estate professional?

The answer to the latter is yes. Even if you are a vet and are adding to your investment portfolio, it is in your best interest to work with an industry professional to handle the deal. Their knowledge and expertise will help you make smarter decisions in this long-term commitment. Reach out to us today. We can help guide you throughout the entire process and get you closer to your real estate investment.

This article is intended to be accurate, but the information is not guaranteed. Please reach out to us directly if you have any specific real estate or mortgage questions or would like help from a local professional. The article was written by Sparkling Marketing, Inc. with information from resources like NAR, Forbes, and MarketWatch.

Call Tim (858) 663-0911

The #1 Luxury Real Estate Specialist in Rancho Santa Fe & North County San Diego For Berkshire Hathaway

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