Why Real Estate & Why Now

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Why Invest in Real Estate

Ocean Head Trader Now, more than ever, it is imperative that individuals take control of their finances and plan for the future. We can no longer depend on company pensions and Social Security to take care of us in our golden years. As we are presented with a multitude of investing and savings options, it can become overwhelming and confusing.

Let’s look at the most common investment options:

The Stock Market

High Risk, Very Volatile
Potential for high returns if you pick the right stocks
The average annual return for the stock market over the last 10 years was 3.5%

Money Market Accounts, Certificates of Deposit (CD) & Savings Accounts

Low Risk, Low Return
Today, if you are lucky, you might be able to get a 1-2% annual return on these types of investments. This doesn’t even keep up with the average rate of inflation which has been about 2.5%.

Real Estate

Did you know you can use your IRA or 401(k) to invest in real estate?
Real estate enjoys low to medium risk with High Returns
Over the last 10 years the median house price has increased by about 50%. If the real estate bubble hadn’t burst in 2008, appreciation would have been closer to 100%.

Real estate has other huge advantages:

Security: Your investment is secured by a physical asset, unlike the stock market.
Leverage: Leverage in real estate is when you invest only the down payment and finance the rest. With a 20% down payment 10 years ago and 50% appreciation on the entire asset, the return on your original investment would be about 250%.
Cash Flow: While your real estate is appreciating, you also receive monthly checks from your tenants.
Control: Unlike the stock market you can improve the property, raise rents, and add additional services. All of which increase the value of your investment.
Tax Advantages: Talk to your CPA or Tax Attorney to see how this applies to you.

Why Invest Now

Now is the best time to invest in real estate since the Great Depression. In fact, more millionaires were made after the Great Depression than at any other time in history. We are now starting to emerge from the Great Recession and history is about to repeat itself.

Interest rates are still at historical all time lows
Many over leveraged property owners are being forced to sell at a deep discount due to the down-turn in the economy
No place to go but up