In searching for the best ways to invest their money, investors around the world are turning to alternative assets like real estate investing to increase their return on investment (ROI), escaping from an environment with low – and sometimes negative – rates. of interest. According to the Wall Street Journal, the appalling current rates are driving more investors to real estate or other alternate forms of investment that provide annual returns.
Although most people still plan to retire at age 65 after receiving returns from their traditional investment portfolios, after adding inflation to the suddenly low expected figure, many retirees are spending their years with insufficient money to his retirement.
Invest money in real estate
In a recent survey conducted by the Bank of New York Mellon Corp., more than a third of investors indicated that they would increase the allocation of their assets to alternative investments, which is a term that includes a wide variety of real estate properties, including commercial real estate, investment trusts (REITs), infrastructure and real estate trusts (FIBRAs), investment properties, real estate and land speculation, vacation homes and vacation homes ready to be used as luxury condos near the best beaches in the world.Read more: Market news position in shaping trade decisions
“The negative rates are encouraging investors to go to more distant sectors,” said Simon Smiles of UBS Wealth Management in a recent interview for the Wall Street Journal. “That means there is a greater interest in alternative investments, such as investment capital, real estate, infrastructure, private debt and hedge funds.”
“95% of investors stated that their investments in real estate met or exceeded their expectations in 2016. The opportunity to grow in the real estate asset class remains substantial.” CASI Capital LLC
Fundamentals of real estate investing
Although the first thing that comes to your mind when you think about real estate investing is buying a property or owning a home, there are actually a wide variety of different routes to generating wealth through real estate investing. From collecting the rent from your vacation home or the rents from other properties, to real estate speculation and investment trusts, real estate is one of the best ways to invest your money if you need to diversify and protect your portfolio from the ups and downs. from the stock exchange.
“Real estate has a low, sometimes negative, correlation with other asset classes – meaning that when stocks go down, real estate goes up,” Investopedia wrote.
In fact, according to data from Robert Schiller, a prominent professor of economics at Yale University, residential real estate prices increased when everything else was falling in 14 of the 15 declining markets, since 1956. What this means for investors of all ages is that whether you are thinking about retiring, hoping to retire early, or simply enter this segment, it is that acquiring real estate can reduce the volatility of a portfolio and provide you with a highest return per unit when risk is factored.
Why Real Estate offers a better Return on Investment?
Investments in real estate are also less dependent on the integrity and competence of investment bankers and financial advisors, increasing their complete ability to provide an attractive return on investment. Even REITS and FIBRAs are protected to some extent compared to other real estate investment vehicles, as REITs require a small percentage of all profits to be paid in dividends.
“Real estate can be a significant counterweight to other instruments, as well as a source of income and, eventually, appreciation,” Investopedia wrote.
Real estate in 2017 and future
As the end of the first quarter of 2017 approaches, the latest research suggests that there is a growing trend among investors looking for alternative assets, such as real estate, with no signs of a slowdown.
“Alternative investment asset classes are today larger than they ever were, representing a total of $ 7.7 trillion ($ 154 trillion),” wrote CAIS Capital LLC. “Investments in alternative asset classes experienced a growth of $ 300 billion dollars (600 billion pesos) in 2016.”
According to Preqin, a leading source of data and intelligence for the alternative asset industry, real estate is attracting the largest proportion of investors, at 61%, compared to other options, such as investment capital (57 %) and hedge funds (51%).
“95% of investors stated that their real estate investments met or exceeded their expectations in 2016,” wrote CASI Capital LLC. “The opportunity to grow in the real estate asset class remains substantial.”
Bottom line: Regardless of your age or income level, real estate offers a wide variety of investment options that can significantly increase your investment returns while risk remains mitigated.