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Benefits of Real Estate Investment vs. Stocks and Bonds

Real Property Management Answers Why Investing in Property Remains Viable

As the economic recovery continues to build, Americans are again able to consume and invest; and with recent reports from the U.S. Census Bureau noting 34 percent of American households are rental units, investors are taking notice and rushing to reap benefits of placing investment funds in single- and multi-unit residential property.

“Investor demand for single family properties remains strong,” said Kirk McGary, CEO of Real Property Management, citing a recent study from Zelman & Associates that found investor demand for residential properties ranking at 60.9 on a scale of 0-100. “Trends like this in the housing market have created significant demand for property management companies like ours, as investors choose to put their money in real estate as opposed to the alternatives.”

The opportunity is even greater in the Portland, Oregon market.  According to a recent National Housing Study, Portland remains “one of the tightest rental markets in the county and a region that keeps growing. The U.S. Census Bureau places Portland’s rental housing vacancy rate at 3.4%. National studies indicate a growing demand for both rentals and homes for sale.”  This trend translates into real opportunity for the savvy real estate investor looking for long term, positive returns.

Although there are many investment options available, real estate vehicles offer the ability to finance a portion of the purchase price to leverage the initial investment to control an asset valued much higher – unlike stocks, bonds and CDs. With lower interest rates available, a small increase in the value of a leveraged property investment can carry a greater return than an unleveraged investment – approximately 12 percent gross according to the same study by Zelman & Associates.

Investing in real estate also offers tax benefits where earnings from investments in CDs, bonds and stocks are taxed. By making deductions from the profit on mortgage interest, cost of property repairs and depreciation, property owners are writing off depreciation of an asset that is actually ascending providing yearly benefits to a long-term investment.

Most importantly, ownership of property improves cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional homeownership costs. Being able to minimize tenant turnover through timely and concise management reflects on the bottom line, maximizing the return on investment overtime.

 

Dan Hayes

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

  1. Dan-

    Great article. HFO has been thrilled working with your company. Is there a way to sign up for email alerts when Real Property Management Solutions posts a new blog?

    Thanks,

    Spencer