When it comes to saving for retirement, the majority of Americans turn to or rely on programs provided by their employers, even though many of these programs have proven to be utter failures in the past. Outside these options, there is the standard financial advisor relationship, which also provides a guided strategy into the same types of investments they lead all their clients toward—stocks, bonds and mutual funds, with some other asset classes for good measure.

When we look at the numbers behind these investments, it makes you wonder why real estate isn’t a natural investment for everyone. After all, it is one of the only investments that are historically proven to be reliable with predictable returns, including a pleasantly high rate of appreciation. According to MSN Money.com and the Case-Shiller report, we can see that from 2000 to 2012, U.S. real estate has significantly outpaced stocks in terms of growth[1]:

Dow-Jones                                      +18.4%

S&P                                                -1.0%

NASDAQ                                       -24.4%

Residential Real Estate                      +36.7%

Seeing these stats, it begs the question: why isn’t real estate an easy go-to investment option for Americans? With this information in hand, it leads us to believe individuals seek investment options they feel are safe and easily managed by another party, preferably an expert. If it’s not a financial advisor, watching the movement every day and making recommendations that leave the investor little responsibility if he or she desires a hands-off, more passive approach, then it’s the 401k group advisor on the work program.

If the presumption that real estate must be a hands-on, active investment in order to be profitable is keeping you or someone you know from investing, here are some fast facts:

  • Real estate can be a passive, fully-monitored investment
  • Some firms offer to do it all for you – find the property, handle the paperwork, get you approved, have tenants already in place, and manage the everyday business
  • Some firms will even assure rental income for a certain period of time
  • The investor receives a predictable monthly income while only paying a management fee similar to that paid to an retirement account manager or financial advisor

Virata Gamany is a guru in capital acquisition and financial modeling, with an inside edge on the real estate industry.

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