“Real estate cannot be lost or stolen, nor can it be taken away. Purchased with common sense, paid for in full and managed with reasonable care, it’s the safest investment in the world.”
This was said by Franklin D. Roosevelt, one of the most famous presidents of the 20th century.
Controlling Your Investment
As a homeowner, you already know the risk that comes with the game of owning residential real estate, particularly single family homes and condos and small residential properties. When people want to invest, they look for a safe and secure return. You don’t want to risk a lot of your money. Real estate provides you with more control over your investment than you have in the stock market or with mutual funds, where all kinds of market influences can affect your return.
Diversifying Your Portfolio
All of us have 401Ks or IRAs or investment vehicles that hold our cash. You need to take some cash out and move it around. Don’t keep it all in gold or the stock market or high risk funds and bonds. Owning some residential real estate other than your principal residence is not a bad idea. It gives you the opportunity to spread your dollars around in different ways.
Cash on Cash Returns
The best way to see in this is by earning a more solid return on your dollar. This is called cash on cash return. We’re looking at five to 15 percent average returns right now, depending on how you finance the house and the art of the deal.
Other than the great recession that we just went through, real estate has been on an upward trend over the last 40 years. There’s a little bit of motion but it’s almost always going up. The good news is, we bounced back from the great recession, so those highs and lows are going to be like they are in the stock market, but with a lot less stress.
If you have any questions about owning residential real estate as an investment, please contact us at McCreary Realty Management.