The world is in a strange state. The uncertainty of it all means that many of us are feeling less eager and more cautious about how we utilize our wealth. As always, we want our money to work for us. But the unknown means risk, and now, perhaps more than ever, risk is a significant deterrent.
When we’re seeing news of a floundering stock market and present and future economic turmoil, it’s totally understandable to be wary. There’s also more reason than ever to turn to real estate investment in times like these.
No, real estate investment is not a risk-free sure-thing. No investment is. However, the real estate market has proven itself to have the qualities to withstand pandemic fears and recession woes. This is, in part, because real estate is essential.
These are just some of the reasons to consider investing in real estate. If you’re already investing in real estate, look at these as more reasons to remain confident in your choice — and to stand firm!
3 Reasons to Invest in Real Estate in 2020
Great Interest Rates
Interest rates are one of the primary reasons that real estate demand remains high, along with home equity. Interest rates for 30-year fixed mortgages have been on a long downward slope from the 1980s, where they peaked at 18.39 percent towards the end of 1981. In the past ten years, the highest rate we saw was 5.05 percent in 2011. The second highest was 4.94 percent in 2018. As of July 2020, we’ve seen the rate dip as low at 2.98 percent.
That’s the lowest interest rate in fifty years. The fact is, it’s a good time to buy or refinance property simply because interest rates are so good. Investors can increase their equity and prevent their monthly passive income from suffering thanks to lower mortgage rates that decrease the burden of debt.
Despite other market fears, the numbers here are pretty compelling on their own.
Its Essential Nature
Real estate is essential. We’ve made this point before, but it’s worth highlighting again. When we look at Maslow’s Hierarchy of Needs, we see that the need for “real estate” — or in this case, shelter — falls under the basic, most essential needs for mankind. Above these essential physiological needs are safety needs, which, in many ways, are also impacted by one’s real estate situation. The quality of that essential shelter, the community in which it rests, and the opportunities afforded to its residents are all among some of the most essential human needs.
If we’re honest, a lot of the things we can invest in are not essential.
Real estate is unique in that it’s something that will always have demand. We’ve seen over the course of the last few months that single-family rental properties, in particular, are in high demand. This is because they provide greater distance from neighbors, more space in general, and are often found in less population-dense parts of a market. With affordability still a big hurdle for many would-be homebuyers, renting a home is often the best solution.
For real estate investors, we don’t need to fear that somehow the demand for rental properties will dry up. This isn’t to say there won’t be tough seasons, but we know, based on the past and on what we know about real estate, that it won’t last. This is the long game, and real estate investors can take courage from the fact that this industry has stood the test of time, economic conditions, and fluctuating priorities.
Income Generation & Long-Term Wealth-Building
Because so many of us are facing threats to job security, we have to be more mindful than ever with our money. So much of being successfully mindful, successfully intentional, is to make your money work for you. That’s something we hear all the time when talking about investing. Investing in real estate, however, brings with it some distinct advantages over other types of investment.
Be sure to check out: How Your Investment Properties Transform Into Long-Term Wealth
Investing in real estate, particularly in rental properties, and especially as a passive investor, is an opportunity to grow both passive wealth and equity. Passive cash flow is a big reason to invest in real estate, but it’s not the only reason. It’s most powerful when combined with the equity gained from each property in your portfolio.
Because passive investors have management teams carefully selecting markets, placing residents, and managing and maintaining the property, you, as an investor, know that you’re maximizing long-term property values.
Investing in real estate isn’t about surviving the tough times in the present. It’s about setting the groundwork for long-term, lasting wealth that brings you unprecedented financial peace-of-mind
Invest in real estate with REI Nation and gain a world-class portfolio and peace-of-mind!