Real estate is becoming a lucrative investment, with investors seeing returns of up to 10% per year, according to new research.
In fact, the real estate industry is so lucrative, it has attracted more than $2.6 billion in foreign investment to the US, according the Real Estate Institute of America (REIA), an industry trade group.
And the real-estate industry has been hit by the recent financial crisis, with the real house price index down from 5,000 in June to 4,500 now.
But a new study finds that the real world is very different to the movie-set reality that has been so popular in recent years.
The report, which was conducted by real estate investor Marc Santucci, shows that real estate investing can be risky.
“In this environment, it is really critical that investors are cautious and act with a sense of purpose,” he says.
“You want to be as smart as possible, but also be cautious and not take yourself too seriously.”
The study also found that people are more likely to buy real estate when they are expecting to make money, and people are also more likely than people in other occupations to take on debt.
“Real estate investment is a risky industry, especially in the early years of the financial crisis,” Santucci says.
So what is it that makes people invest in real estate?
“There’s a lot of research into the psychology of investment and it seems like people who have experienced the recession are more inclined to go for real estate investments,” Santini says.
And when they do, they often buy homes that are a bargain compared to what they could have gotten elsewhere.
“People are looking for a good deal,” he explains.
“They’re looking for something they can afford.”
Real estate investments can also be made for a variety of reasons, Santucci points out.
“I have a client who wants to sell his house and make a profit, but he’s not a real estate expert,” Santetti says.
The real estate market has a lot going for it “Real Estate Investing in the USA: How Much Does it Cost?” was published by the REIA on November 11, 2017, and is available for purchase at realestateinvesting.org.