The stock market rollercoaster of August 2015 has been a big wakeup call for individuals to seek more reliable investments. For many that means direct investment in real estate.
Over just two days of trading in August stocks lost over $2 trillion in value. Some individuals reportedly lost billions. Even gold and oil free fell. Experts warn that this was just a taste of what is likely to come. We’re all told to diversify broadly and look at the very long picture, but that doesn’t work for everyone’s timeline, if virtually all stocks are sinking, and if you pretty much get totally wiped out.
In contrast real estate can offer incredible security. For those seeking growth now the time is ripe to get into real estate too. Even when real estate markets fluctuate, which every type of asset class does, the income can keep flowing. For most this is the most important part. Whether you are intelligently letting passive income pay for your spending and living expenses while young, compounding investment returns by reinvesting yields, or are in retirement, cash flow is king.
The only thing that has held some back in the past is that although they appreciate the safety and return potential of real estate, they haven’t wanted to have to roll up their sleeves and do DIY work or deal with tenants as hands-on landlords. That’s fine, you don’t have to. There are vehicles which can help streamline and automate real estate investing for busy individuals. Just make sure to avoid those with stock like qualities such as publicly traded REITs. Turnkey real estate investments are one option, but so is getting together in small private partnerships or solo investing, and getting a good property management company to handle all of the day to day.
There are many types of real estate to invest in. And you can still diversify between the bastions of safety but low growth like Boston, and faster growing markets on the outskirts like Worcester County. Retail and mixed use properties can be great choices, but multifamily apartment buildings, and portfolios of single family rentals can be less reliant on the performance of the stock market. Everyone needs housing all the time, and rentals continue to grow in demand, and returns.
So how will you decrease your exposure to wild stock market swings, and ensure the income and wealth you need and desire?