Investing in Real Estate

For the past decade, the real estate market has been experiencing some fluctuations. For years, it’s gone back-and-forth as being regarded as a safe investment. Now as we’re entering the end of 2015, investing in real estate is once again a relatively safe choice.

While most investors are still experiencing feelings of unease after the 2008 market crash, investment portfolios are once again being diversified with real estate investments since 2013. Some are even saying investing in real estate is safer than investing in gold.

And why would’t they? Real estate investments tend to have an excellent long-term yield in addition to being a great hedge against inflation. The trend to invest locally is popping up, as discussed on the Blue Rock Real Estate website. The driving force behind the trend, according to Richard Spillane of Spillane Money Management, is that investors buy properties in familiar neighborhoods partly for the income and partly for the diversification. The attraction to the properties is that investors can actually “get their arms around” them.

While there are still a few investors ready and willing to invest in properties that are miles, states, and oceans away, Elke Mariotti, a CFP and an agent with Signature Premier Properties in Huntington, N.Y., said the appeal to investing locally is in its simplicity.

In today’s market, real estate investing is more about capital preservation, as there is little impact on commercial real estate yields due to the spread between cap rates and interest rates remaining so great. U.S. real estate is a fully-priced market, and investors know it.

In the last year, Chinese investors have surged nearly $6 billion in United States commercial real estate properties, $4.5 billion of which went directly to properties in Manhattan. Foreign capital is beginning to look at secondary markets as lucrative, and are clearly taking advantage of it.

To learn more, visit Jerold Novack’s asset management blog here!