Where are we headed with Real Estate in today’s economy? So many experts and so-called experts are trying to forecast the near future for investors and residential home buyers and sellers alike. Some have reasonable and logical ideas we can get behind, while others seem way off base, possibly living in another country and muddying the waters. So at face value, it isn’t easy to know who’s right. My reason for writing this is not to say I’ve got all the answers. Instead, my purpose is to lay out what I know, and as the reader, you can decide what’s right for you.

With inflation hitting all-time highs, according to Investorjunkie.com, “The Inflation Rate Just Hit a New 40-Year High.” Additionally, with the markets declining, the S&P 500 is down over 21% from the beginning of January thru June 13th; Investopedia.com is reporting that the “S&P 500 Hits Bear Market Territory.” So what’s an investor to do? Especially an investor trying to ensure their retirement years are not filled with various part-time jobs to earn a living.

As some have put it, Real Estate can generate predictable cash flow and tax advantages that offset the impact of capital gains and run ahead of inflation. However, speaking of capital gains reminds me of another benefit, excellent income potential.

Several weapons in the Real Estate investor’s arsenal can be used to accumulate wealth and generate income. As their properties appreciate, investors are automatically increasing their bottom line. Rental income; a monthly rent check that more than covers their mortgage will increase the value of each property in equity by systematically paying down the principal owed. Furthermore, Real Estate as an investment vehicle is one of the few that can produce healthy returns for the investor, who can then enhance those returns with available tax benefits.

Other more passive vehicles are investing in notes backed by Real Estate assets. Professionally managed, these types of investments offer peace of mind as they are subject to regular audits. Investments in private Mortgage Notes are also good opportunities for investors, but these may not be for the faint of heart and depends on how much risk you can handle.

REITs, or Real Estate Investment Trusts, are also wealth-building options. REITs allow individual investors to be invested in part of a larger-scale income-producing Real Estate portfolio, but at a fraction of the cost of buying on your own. You can purchase REITs on any trading platform, like Robinhood, E-Trade, etc. And a side benefit to owning shares of some REITs is that they may also issue dividends, another clever way to grow your wealth.

REITs come in different varieties too, so if you don’t think luxury hotels that focus on properties in Antarctica will do well, put your money into something you like. For example, I own some REITs that focus on companies operating in Health Care Services, Software & Services, Energy, and Food & Beverage. Other ones I own shares in, one concentrates on Campus Communities, which it seems that no matter what the economy is doing, kids are still going to college, and that one has doubled over the last three years. The other one that has done very well for me is an apartment community REIT. Even if people can’t afford a mortgage, they still need a place to live. That one has quadrupled in the same time frame.

The examples I just illustrated are ones that I own based on listening to the advice of professional money managers. I am not a financial adviser, nor do I play one on TV, so I am not making any recommendations or stock picks – this is a strictly personal experience I’m relaying to make a point.

Anyway, I am seriously looking into easing up on my stock purchases and starting to look into investing in Real Estate. Sure there’s a good amount of alarming headlines in the financial publications; however, it’s not all bad news; although housing prices are increasing and mortgage rates have gone up quickly, that is unquestionably true; however, not at an outrageous rate yet. So you can still find good deals out there. 

In conclusion, it seems like our financial world is on fire; the stock markets are bleeding out. Have you seen the freefall that is happening with Bitcoin? Since January 2021, it has never been below $30,000.00 per coin. It went as high as $65.5K (that’s per coin, folks) in November of 2021. This week, as of this writing, I’m tracking it on my TradingView.com charts at $20,708.80/coin. Trading view analytics recommends you sell. Really? What if you bought it at the peak? That would be what I call Great Depression-era problems. Anyway, no matter how you invest your hard-earned money, do it carefully and have a great team around you to help you avoid as many pitfalls as possible. Nothing is trouble-free, but we must use caution and make well-planned choices. 

As Mark Twain wisely put it, “Buy land, they’re not making it anymore –”

Written by: Kevin French – Private Money Lender 

Let me remind you if you need funds for any Real Estate investment projects, Alternate Funding Solutions is a Private Money Lender, and we would be happy to help you expand your business. So if you need cash, call us at 1(800) 366-WIN-1 or 1(800) 366-9461