Hey guys, can you think of an investment that is safe, stable, and secure in today's environment?
We know the stock market's crashing.
We know the crypto market crashed.
And we know other market assets are crashing right now.
So is there an investment out there that people can really trust?
The answer is yes.
And Americans already know this:
The most recent study shows that for the last eight years straight Americans trust real estate more than any other asset class.
Here's the question mark I have for you:
Are you out there beating this drum? Are you the evangelist about real estate to your own clients and talking to them about the fact fact that they need to diversify their portfolios, you know, rebalance their assets, and get some of that money over into residential real estate?
One of the safest, most stable, secure investments they could possibly make.
Now, how do we know that?
Well, all markets are based on supply and...
I had a real estate coaching student come to me recently and asked me if she should invest her equity of her home into other real estate.
And it's a question she was getting from her clients as well.
So I explained this to her in a story form, so she could explain it to her clients as well.
So let's assume that you had $400,000 in equity in your home. And you leave $200,000 equity in your home and you pull $200,000 out.
Now, how do I pull it out? I refinance it or I get a HELOC loan for that $200,000.
So now I have $200,000. Of course, I'm paying interest on it. It's not free money. Let's assume I'm paying 5.5% interest today.
With that 5.5% interest, I now have to beat that rate of return in order to make money.
So let's assume then I go out and I take that $200,000 and I find an investment property. Maybe it's a duplex or a triplex, and I spent $700,000 on it.
That's reasonable because they gotta put 25% down generally on investment...
There's one thing we've all done as human beings, living in the United States of America. I guarantee every adult has thought about this at some point:
They've thought owning a rental would be super cool.
Even if they're not homeowners yet, they've thought it would be nice to be on the other side of the equation — and not be paying rent, but also receiving rent.
So this makes for a great conversation. And there's something interesting that's happening in the world today, which we don't talk enough about in the real estate world, which is this:
A lot of millennials and the next generation of buyers coming in are being taught and embracing this concept that they don't want to own their own home.
They wanna continue renting their own home because they want a mobile lifestyle. And they wanna be able to move from New York to Miami to LA. They wanna surf around and have that mobile lifestyle, but they wanna own a couple rentals.
Lawrence Yun was recently quoted as saying, "If you are under the age of 40, you have never seen inflation this high in this country."
The inflation rate in November hit a record 6.8%. That's the highest we've seen in decades.
So when we look at these numbers and everybody's talking about inflation, how does this relate to estate?
It's an interesting conversation. It's something that we should talk about with our clients.
Here's the good news when it comes to real estate:
Real estate is a tremendous asset and a hedge against inflation. That's why last year, we saw a record number of people investing in real estate. In fact, it was the the highest recorded ever. The percentage of homes purchased was 18.2% were sold to investors.
One reason is they're using it as a hedge against inflation.
So here's what's happened according to Lawrence Yun. He says that real estate has proven to be a good hedge against inflation. Some examples:
In the 1970s,...
If you know people in your sphere of influence that own investment property, I've got some good news. Also, if you own an investment property, I've got good news. And if you're trying to sell investment property, I've got good news:
The investment property side of our business is going through a real resurgence right now. We knew during COVID they got kinda hit. We know the eviction moratoriums made it really tough for them. But now we're starting to see people come back out of that.
So here's a few good numbers in that arena that come from us from the NAR economist blog:
Two of them are dealing with absorption rates. Absorption rates, meaning how many units are being absorbed by the market.
In Q2 and Q3 of this year, 700,000 units were absorbed by this market. It's a lot of units, but completely instantly absorbed by the market.
Vacancy rates have fallen in 2011-ish from 6.9 back then all the way down to 4.6 now. That's a nationwide...
Hey guys, a recent report shows that inflation is rising rapidly. It's the highest it's been in 13 years — up to 5.4% right now. When we look at that number, we should look at it from the perspective of: How does that impact us as REALTORS and our clients?
As REALTORS, the one thing we should be concerned with is if we took $100k and we put it in the bank and waited a year, based on this inflation rate, then at the end of the year, our $100k would only buy $94,400 in goods. So that's not a good thing. We need to make sure that we're investing in assets that are rising faster than inflation.
And we need to encourage our clients to do the same thing.
One of the best hedges against inflation is real estate. Which is good news for us.
We need to be talking about this with all of our clients that real estate is one of the best hedges against an inflationary market.
One of those reasons for that is that we can look at appreciation...
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