The real estate facts that are listed here are designed to help you familiarize yourself with various aspects of the market.
- Real estate investing is one of the best ways to secure an early retirement
Becoming a real estate investor can help you build a sizable nest egg in a relatively short period of time. By buying an investment property and renting it out, you can generate a steady positive cash flow for years. As long as you properly manage this money and continue to slowly build your rental property portfolio, you can put the extra income towards securing an early retirement.
- Real estate has a low barrier to entry
One of the most interesting real estate facts is the low barrier to entry of the housing market. Contrary to popular belief, you don’t need to invest big to start making money with real estate. In fact, you can put in as little as 15% of the total sum of the investment. This makes real estate a much more interesting option than traditional stocks or bonds.
- Millennials constitute the majority of home buyers
US housing market 2019 data shows that millennials have completely eclipsed baby boomers and Gen Xers when it comes to buying homes. They’re also expected to take on more mortgages than any other demographic by next year. The implications for real estate investors are not negligible. As a matter of fact, this shift is an encouraging sign. If you plan on buying an investment property to quickly sell it, you should be able to sell it if you first learn what millennials are looking for.
- Your real estate investment will pay off your loan
One of the amazing facts about real estate investing is how effectively your loans can be paid off. By renting out an investment property, you will be able to generate enough income to pay off your debt in a gradual manner. In essence, your tenants are helping you build your wealth and equity with each monthly payment they make.
- No other investment affords you as much control as real estate
When you make a real estate investment, you’re completely in charge every step of the way. Everything from the strategy you want to implement to the mortgage provider you want to get your loan from is up to you. Furthermore, you have the option of screening tenants and only renting to those who fit your requirements.
- Even subpar neighborhoods are attracting buyers
This doesn’t necessarily fall in the category of real estate facts as it is subject to variable market conditions. Still, current market trends seem to indicate that even properties situated outside the best neighborhoods are selling well. This is especially the case in large real estate markets. The fact that areas without easy access to highways or essential amenities are performing well bodes well for real estate investors.
- The real estate market will continue to grow
Of all the real estate facts on this list, this is probably the most consequential one for reticent investors. Despite some bearish resistance a few years ago, the US housing market 2020 projections are overall bullish. More importantly, all the indicators that are used to predict market growth are trending upwards. Here is an overview of the most important ones:
- The unemployment rate is low and the job market is offering new opportunities
- Fewer buyers are using interest-only home loans
- The younger generation is willing to invest in real estate
- Taxes are fairly low
- Spending in the economy is steadily increasing
- Real estate investing comes with several tax benefits
On top of its high-profit potential, real estate offers a number of tax benefits. First of all, income that is generated through real estate investing is not subject to FICA. The only exception to this is when this income is paid as a salary through a holding company. In addition to this, there are other benefits on lower capital gains, refinancing, depreciation, and 1031 Exchanges.
- Investing in real estate is the best protection against inflation
Owning a rental property can be the perfect hedge against inflation. While most assets tend to wilt under inflation, real estate experiences a boom during those periods. The reason for this is quite simple. As inflation increases, so do the value of your investment property and the rental income that it generates. Moreover, the average appreciation rate in the US has consistently been higher than inflation rates, so real estate investors are assured of beating price spikes regardless of their strategy.
- Real estate appreciation will send your net worth soaring
Appreciation is one of the main reasons why you should consider investing in real estate. A real estate portfolio will appreciate in value over time without requiring any direct intervention on your part. You can expect an average appreciation rate of 5% in most markets. Consequently, your net worth will grow exponentially in a rapid fashion.
