Ken Fisher Answers: Is Real Estate a Good Investment?

#realestateinvesting #realestate # #realestateinvestor

Have you ever thought about investing in real estate? Do you know someone who has successfully invested in real estate? While real estate can sometimes be a good investment, it usually isn’t quite as good as many people think.

Oftentimes investors don’t consider the full costs of owning real estate. Some people overlook the taxes, interest payments, and maintenance that go along with real estate. In addition, managing real estate takes time! Either you will have to do work yourself to manage it, or you’ll have to pay another person to do so—which costs money.

When you think of the often-overlooked costs—whether they are your time and labor, paying someone else, or not-so-obvious costs—the total return isn’t quite as high as it may initially seem. Don’t overlook what the true total return is—you need to keep all of these additional costs in mind when evaluating if real estate is the right investment for you. And don’t forget the importance of the right place and right location—they can have a big impact. Not all real estate investment opportunities are created equal.

Overall, real estate tends to have returns that are lower than stocks, but higher than cash. Real-estate investment can be good or bad—but don’t forget to properly evaluate the actual total return.

If you missed Ken discuss the importance of investing in a 401(k), watch it here.

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[patrickkgoodwin]

Ken is like my college finance professor Sally Jo Wright easy to follow and on point.

[joemc]

Thanks Ken at my age I am in Mutual funds and some stocks no bonds I’ve been watching the market since 1970.

[greghanna]

Are feelings of satisfaction and no regrets over time with one's real estate investment considered a lever when evaluating one's investment decisions. I admit there is confidence bias in this.

[keywinhomes]

We have a debated about real estate as an assets in 2012. We bough a home and a rental while my financial advisor invested in several over-funded life insurance and living with his parent. Fast forward to 2020 and he still waiting for another moon shot crash worst than 2008 for residential real estate. Salesman are good at selling because they believe in theirs own cookies. I bough simple term life insurance from the guy, but nothing more since our net worth grown 10 times than his after college.

[bccron]

Not always a friends Dad bought land in the hamptons a long time ago bought (built)for about 50k and sold it for 6, 000k what a GROWTH

[kenpumford]

Oh my, it's hard to know where to begin. Without getting into the details, my hands-on self-managed real estate portfolio has achieved between 20 and 25% annual return over the past 7 years (although that rate of return is decreasing as equity builds up). The private placement passive real estate investments we've made in apartment communities in growing metropolitan areas have returned or are returning between 8 and 25% annual returns.
Sure, you could invest in real restate and do worse than the stock market and better than cash if you don't know what you're doing because you didn't take time to educate yourself. But if you do educate yourself, the same growing economy that has been so good for the stock market has meant that real estate has been a fantastic investment vehicle over the past 10 years.