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“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full and managed with reasonable care, it is about the safest investment in the world.” — Franklin D. Roosevelt
FDR recognized how lucrative real estate investing was in the 1930s. What he said then holds true today. That’s why thousands of investors choose real estate as their asset of choice. Whether you’re an aspiring real estate mogul or a long-term investor looking to learn something new, this post is for you.
1. Forbes claimed global real estate is the safest bet for investors
According to Forbes, experts expect real estate prices to continue growing through 2022, despite inflation and rising interest rates.
However, economists at Fannie Mae think there is a reasonable chance for a market downturn in 2023. This may adversely impact home prices in certain markets, but ultimately the relatively low inventory will continue to force demand for housing, keeping prices from falling too much.
2. There are 28.1 million Americans investing is residential real estate
Auction.com breaks it down for us:
- 1 in 9 US adults owns a residential property
- 9% of US adults own investment properties
- 3% of US adults consider themselves to be investors.
3. Real estate caught up to IRAs and money market funds as a US investor asset
The number of real estate investors in the US today is about the same as the number of Americans who have Roth IRAs. It’s also nearly the same as Americans who are money market fund shareholders.
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4. People continue to show interest in buying real estate
A survey conducted by UBS found that 44% of respondents plan to buy residential real estate in the next 12 months. It was not clear what percentage of those buyers are investors versus primary-home buyers, but the results indicate that competition for listed homes will not diminish as much as some had hoped in the coming months.
5. 37% of real estate investors do not have a college education
You always see articles on top tech moguls and wildly successful entrepreneurs who built an empire without a college degree. It appears that a similar trend is prevalent in real estate investing. While a majority of investors have a bachelors degree or higher, a surprising 37% have never attended college.
6. 34% of active real estate investors make more money than the average US household
It takes money to make money! According to Fortune.com, the median income for a US household is about $68,000. In contrast, a majority of active investors are pulling in $75,000 a year or more.
Of course, there's no rule that says you can't work your full time job and supplement with income from investment real estate on the side — that way, you get the best of both worlds!
7. $9.2 billion dollars is spent on investment property rehab and repair each year
Investors spend a median of $7,500 on rehab and repair per investment property. When you multiply that out, it amounts to a massive annual total that is divided about 50/50 between local labor and suppliers.
Thinking of rehabbing your own investment property? HomeAdvisor can connect you with up to four top local professionals to quote your project, free of charge.
8. Homebuyers are getting older
Research shows that the average age of homebuyers in the US has risen to 33. This is the highest level since 1981.
Part of this could be explained by millennials waiting longer to buy homes, but data also suggests that a persistent increase in older repeat buyers has a significant influence on the average age.
What this means for investors is that the older generation is either moving more frequently, or they are buying multiple homes as either investments or second-homes.
Either way, if this trend continues, it is likely that demand for real estate will remain high for the coming years.
9. According to NAR, the top reason investors bought property was to rent it out
The National Association of Realtors surveyed real estate investor to see what their primary motivation was for buying real estate. The results were:
- To generate income from rent (37%)
- Because they got a good deal on it (17%)
- Anticipation of good returns (15%)
- For retirement (10%)
- To use as a personal or family retreat (6%)
- Because mortgage rates were low (7%)
- Unspecified reasons (6%)
10. The average length of time investors plan to own a property they purchase is 5 years
45% of investors plan to own for six years or less, and only 15% plan to own for 11 years or more. By contrast, among buyers who purchase a primary residence, 30% plan to own their property for 11 years or more, double the number seen among investors.
11. Many people still think it's a good time to buy
According to Fannie Mae, some home buyers still think it's a good time to buy a house. In fact, 22% of survey respondents agreed with the statement that now is a good time to buy, up from 17% month-over-month. If competition continues to diminish, it is likely more people will consider it a good time to buy.
For investors, it's important to think big picture. If demand for housing goes down, then price growth will likely slow or even decrease slightly. That only benefits investors who want to get their property at the best price possible.
Ultimately, every market is different, so you'll need to keep an eye on houses in your area and decide what is the right price for your next investment.
If you enjoyed this list, share it with your real estate investor friends!
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