CHAPTER 2 Thinking About Investing?
Before we begin, I want to point out that this section is geared more toward people who are interested in becoming a real estate investor but want to know more. If you’ve already started down this path, you could theoretically skip this section; however, if you flip through the pages of this section as you move to the next, you might find some new information. Maybe you’ll learn some strategies you haven’t tried yet or weren’t even aware of. Perhaps you’ll find validation you’re on the right track or a reminder of why you got into investing in the first place. As for those of you looking to get into the real estate investment game, my goal here is to give you all the information you need to decide whether real estate investment is suitable for you and then teach you how to jump in. So, let’s get you started!
THE STATS
According to a 2019 article on Investopedia.com, the average commercial real estate investment returns over 20 years are around 9.5%. Diversified and residential investments average about 10.6%. Both are higher than the S&P 500 Index, which has an average annual return of about 8.6% over the last 20 years. By the way, all these figures include the housing price burst in the 2008 recession, during which real estate investment still did better than the housing market. These stats alone obviously show a great reason to buy real estate. But what do investors hope to get when they’re buying property? 5
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