Real estate is one of the very few investment assets considered inflation-proof. And because of that, it has remained one of the most preferred low-risk investment channels for many. However, even the most reliable investment opportunity has witnessed ups and downs. The housing market crash of 2008, the pandemic-induced slowdown, and recessions, all these market shifts have hindered the real estate market in countless ways.
With the market scenario looking such doom and gloom, it begs the question: is US real estate still a safe haven for investors? Should a novice investor dare invest in the most lucrative legacy-class asset that could crash again like it did more than a decade ago? And even if it is still reliable, what should be the ideal strategy to reap the maximum returns?
- Has Real Estate Shown Promising Growth?
Investors call it the “sniff test”. It is a quick assessment of the investment to see whether a situation appears legitimate and has the potential to make money. Since so much has changed in the real estate market, many investors are hesitant to invest in this sector. Let us assess whether or not real estate has promising growth in the near future. As per the Zillow researchers, US home prices would increase by 14.9% between March 2022 and March 2023. As per the same report, roughly 6.09 million home sales are expected in 2022, which is a decrease of 0.5% from 2021. While the growth of this market is somewhat mixed, one needs to wisely choose the real estate asset to gain the maximum returns.
- Where to Invest?
While the real estate market has not hit absolute rock bottom, one must invest smartly to avoid critical losses. Many experts recommend investing in income-producing real estate. That means properties purchased as investments and rented to tenants. While the housing crisis persists, investors can turn this adversity into opportunity. Investing in multifamily homes is an excellent way to make money. Multifamilyhomes provide affordable housing options and are in tremendous demand. They are cost-efficient, offer optimum security and privacy, and are easy to manage. People have started preferring multifamily houses more and more. In fact, as per RealPage’s report, the net demand for apartment spaces reached 712,899 units in March 2022.
Commercial real estate is another excellent example of income-producing low-risk real estate investment. Although it requires significant capital, it also offers handsome returns if appropriately managed.
- Is it safe?
Real estate has been traditionally considered a sound investment as it renders passive income, tax benefits, diversification, and excellent returns. However, recent changes in the market might make one question the investment prospect. While certain risks exist, one can limit those risks by doing due diligence and conducting a thorough market analysis. What makes income-producing properties more than a haven is lucrative returns. And one can expect returns between 6% and 10% net per year if approached professionally.
Read More – Investing in Property in the UAE: How Much Do You Need?
Final Thought
Risk is an innate part of the investment, and a wise owl knows how to mitigate those risks. While the US real estate market is exhibiting positive signs for investors, investing smartly in income-producing assets is the way to go. Moreover, investors need proper guidance to help them mitigate those risks with sound financial advice. Homz Fund, the first-ever national multi-family fund, is developing sustainable housing communities across the US.
It is backed by the US Treasury Bond, which means you can remain assured of high capital appreciation. With Homz Fund, you can become a part of a new-age economic transformation with roots tied to the development of communities.