Why You Should Invest in Cash Flow Rental Properties
98% of the 10.8-million rental property investors/owners are actually small entrepreneurs, who own five or fewer units — not large-scale players with hundreds of units in their portfolio.
You can do this…
1. Competitive ROI
In the period from December 31, 2000, to December 30, 2016, real estate outperformed the stock market approximately 2:1.
Cash flow real estate regularly delivers returns in the high double digits.
2. High Tangible Asset Value
Since 1776, U.S. real estate has doubled in value every 20 years.
By renovating (even adding fresh paint!) your property, you increase the value and can ask more for a flip or charge more in rent when buying and holding.
3. Attractive and Stable Income Return
With cash flow real estate, you earn income from day one, plus a lifetime stream of monthly (rent) payments.
And while capital gain returns fluctuate with the market (i.e., volatility), income returns from real estate remain stable, and have historically increased.
The evidence is out there that diversifying your investment portfolio — even among small-, mid- and large-cap stock picks alone — is more likely to produce positive results over time.
This 20-year asset allocation chart (1996-2005) illustrates the increasing lack of correlation when you throw in other asset classes, such as cash, bonds, commodities and real estate.
“The industry sectors and the S&P 500 index show a nearly 90% correlation when we look out five years. However, real estate stands uncorrelated from the pack.”
In all the U.S. equity bear markets of the past 60 years, the only asset class to perform as well as bonds has been residential real estate.
“Residential real estate might even be a superior hedge than bonds in the next equity bear market,” according to Yale University’s Robert Shiller, winner of the 2014 Nobel Prize in economics.
5. Inflation Hedging
As economies expand, the growing demand for real estate drives rents higher, leading to larger capital values. And by responding to inflation by passing some of the pressure onto the tenants and absorbing the rest through capital appreciation, real estate is able to maintain its capital purchasing power.
Wondering where real estate investing works best?
Find out why Realtor.com, CNBC, Business Insider, HomeUnion, TheStreet and Mashvisor have all listed Detroit as 1 of the 10 best cities for Real Estate Investing.
Want to know what type of property will work for you?
Contact our Director of Investments