With 2020 just getting started, you must be thinking about the best ways to invest money in the new year. There are plenty of investment strategies in the US, including residential real estate properties, so which one should you go for? Indeed, in 2020 real estate is not only a good investment but actually one of the best things to invest in. Wondering why? Read through this article to figure out what reasons make real estate investing a top choice among the numerous ways to invest money.
5 Reasons Why Real Estate Is a Good Investment ALWAYS
Before we dive into the specific US housing market predictions for 2020 which make real estate stand out among other investment options, let’s have a quick look at the general advantages of this strategy. Taking all these factors into consideration, the answer to the question “Is real estate a good investment in general?” is YES YES YES.
1. Good Investments Are Low Risk
While any investment holds a certain degree of risk, the best investments to make money tend to be relatively low risk, at least relative to the rate of return that they offer. This is exactly the case with investing in rental properties. As real estate properties are tangible assets, it is virtually impossible to just lose everything as a property investor, while the same cannot be said about stock investments. Even if the overall US housing market or the local real estate market goes through a recession, it is bound to come back. People will always need a place to live, no matter what, so real estate demand is guaranteed to be there. The fact that real estate is a low risk strategy makes it a good investment at any time.
2. The Best Investments Provide a Hedge Against Inflation
The reason why so many people in the US and elsewhere wonder where to invest their money is to protect it against inflation, otherwise, they would keep it in the bank where it’s quite safe. Investing in real estate, actually, is a hedge against inflation. The value of properties in any real estate market rises over time, and this is known as natural appreciation. The main driver behind this phenomenon is the fact that the land on which real estate properties are built is a limited resource, coupled with the ever-increasing population which puts more and more pressure on the demand for housing. Indeed, the average annual rate of real estate appreciation has exceeded the average annual inflation rate in the US housing market in the past decade, and this trend is expected to continue into 2020 and beyond.
3. Investing for Income Is Important
The best way to invest should provide investors with money not only in the long term but also in the short term. Rental real estate properties allow a real estate investor to start making money right away. Once he/she is done buying a rental property, this property can be rented out immediately to start generating monthly rental income and return on investment. That’s why investment properties are frequently referred to as income properties. With the real estate investment strategy, you don’t have to wait for years for your assets to appreciate and capitalize. Moreover, you can choose how to make money in real estate for the maximum return: with a traditional rental property or an Airbnb investment property.
4. Making Money in the Long Term Is Also Important
Wondering where to invest money to get good returns in the long run? The answer is REAL ESTATE once again. As mentioned above, real estate appreciation happens naturally, without any efforts on behalf of the investor. This means that with residential investment properties you can make a lot of money passively once you decide to sell your house. Now, if that’s not a good investment, what is?!
5. Real Estate Investing for Beginners Is a Viable Option
Many of the best investments are difficult to get started in as they require extensive knowledge and understanding of the market. Moreover, many of them necessitate full-time devotion in order to generate the best return on investment. This is definitely not true about real estate. First of all, you don’t need any specific degree if you are thinking about how become a real estate investor. All the knowledge and real estate data that you need is available online. A good resource to begin with is Mashvisor’s blog where you will find thousands of articles ranging from how to get started in real estate to the best places to invest in real estate in 2020. Second, buying rental property with good cap rate and cash on cash return does not involve detailed expertise or manual real estate market analysis and investment property analysis anymore. In 2020, the best real estate investment tools allow investors to find a profitable income property for sale in a matter of minutes. Third, to invest in real estate, you don’t need to leave your 9-to-5 job. With the help of software tools and professional property management, you can make passive real estate investments on a part-time basis.
So, you can see why real estate investing is good in general. But how about in 2020? Will this be the case again?