If you’re looking for new ways to invest as part of an effort to diversify your portfolio, you may be wondering, “Is real estate a good investment?” It’s easy to look back a few years at the 2008 market when the bubble popped on a lot of real estate investments, but even with this setback, the overall trend of the market is that real estate reliably appreciates over time.
At Dani Beyer Real Estate, our staff works with individuals and families buying and selling homes, but we also make a valuable partner for investors looking for market insights and valuable properties. Here are a few reasons why investing in real estate is a good choice:
Real estate appreciates over time. Unlike purchasing a car, in which you begin to lose money as soon as you drive it off the lot, real estate gains value the longer you keep it. Properties tend to appreciate in value approximately three to five percent each year, so purchasing real estate can be a great way to increase your net worth in a relatively short period of time.
Real estate helps diversify your portfolio. The real estate market has a low correlation with anything happening in the stock market, so it can be a solid investment that lowers the overall risk of loss. Spreading your assets out over a variety of types of investments is always a good idea, and including real estate in the mix helps you protect your money for the future.
Real estate has a high tangible asset value. A stock can go down in value, all the way to zero, causing you to lose your entire investment in that stock. It would be pretty rare for that to happen in a real estate investment situation. Land always has value and any structure on the property will also have tangible value.
Real estate allows you to leverage your capital. If you’re still asking, “is real estate a good investment?” consider one final aspect of including real estate in your investment portfolio. You can borrow money from a lender to purchase this investment, something that will never happen if you purchase stocks or bonds. This is a distinct advantage over other types of investments that make real estate attractive.
To learn more about determining if real estate is a good investment for you, contact us at Dani Beyer Real Estate. We can help you identify the best types of investment properties and help you build an investment portfolio that minimizes risk while building for your future.