Category: REITs
Growing Your Wealth Through Real Estate
As an investment, the case for real estate remains a good one. Not only has the sector outperformed the S&P 500 over the past 40 years (an average annual return of 9.3% for the NCREIF Property Index versus an 8.7% return for the S&P 500), it’s done so with dramatically less volatility (7.8% compared to 16.4%), according to the S & P Dow Indices and NCREIF. Real estate has a low correlation to stocks and bonds. Because it’s a lagging economic indicator — it rises and falls well after the rest of the economy — it moves differently than stocks or bonds. What’s more, real estate markets are unique. The factors that can sink home prices in one market can have no bearing on another, although that’s not always the case. Although the real estate market has plenty of opportunities for making gains, buying and owning real estate is a lot more complicated than investing in stocks, bonds and mutual funds. Perhaps the biggest difference between a rental property and other investments is the amount of time and work required. If you invest in a rental property, there are many responsibilities that come along with being a landlord. You should also consider the amount of time required to deal with the investment. You may want to consider hiring a real estate property management company to handle the day-to-day operations of your real estate portfolio in exchange for a percentage of the rental revenue. Because of the time involved in manag
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