There’s a lot of fear and uncertainty when it comes to investing in the stock market. And rightly so. It looks like we’re in for higher interest rates along with a market correction. So, if you can’t count on the stock market, where else should you invest your money?
Here at Jones Fiduciary Wealth Management and Jones Real Estate Access we’re directing clients to diversify into real estate. Real estate investing is a historically proven way to beat the traditional markets, if done properly. The benefits include tax advantages plus capital appreciation.
It’s a poorly kept secret that wealthier investors don’t count solely on the stock market when it comes to growing and preserving wealth. Typically, the stock market returns an average of 9%. Real estate investments can return 12-25% depending on the type of deal. So why don’t more people do it? It’s not easy to find a non-publicly traded fund that’s easily accessible. That’s where we come in. More on that later.
If you’ve been thinking about other investment options, now is a particularly good time to get in on the action. Here are a few reasons:
- Real estate isn’t subject to emotional purchasing
Many stock purchases are based on an emotional decision — primarily fear. Real estate investing, especially with a professional and experienced real estate investment team behind you, is based on real-life market trends and research. Our holdings don’t directly correlate to the health of the stock market. Our team is currently focusing on investing in multifamily affordable rental properties because there is a rise in rentals and a scarcity of new homes, along with other tangible factors. Our partners have managed over $89 billion in multifamily properties and portfolios totaling more than 1 million units for over two decades. That experience is necessary when you’re looking to gain access to deals that are typically only accessible to the top 1%.
- Shifting lifestyles
The built to rent, or build for rent market, is hotter than ever before. From first-time home buyers to empty nesters, people are more interested in renting. We’re seeing rising interest specifically in multifamily communities, which feature one owner or property manager. These communities typically feature amenities such as a pool, clubhouse, and covered home maintenance. The move to these communities is partially due to cost constraints being faced by middle market Americans. This shift is good news for investors in multifamily properties, since this sector offers flexible lease structures, which leave room for annual rent resets and inflation. The national rent average has surged by as much as 78%.
- Reduced housing supply
Inventory is tight, with more people staying in their home instead of taking on a mortgage with a higher rate. CNBC recently reported that “nearly 40% of Americans between the ages of 25 and 44 who bought homes last year plan to stay in them for 16 years or more, according to data from the National Association of Realtors. For homebuyers between the ages of 18 and 24, that number jumps to 48%.” Yet, affordable rental properties are scarce. Demand for these properties is projected to outpace supply through at least 2030. This is why we’re seeing multifamily properties, whether they’re apartment buildings, complexes, townhouses, or single-family homes, experiencing such high growth.
Real estate investing isn’t just for the elite anymore. For decades, real estate has been, and will continue to be, a way to grow and preserve wealth. You need to work with experienced real estate investors who have a track record and a wealth of knowledge in the field. As always, we’re here to help. Accredited investors are invited to join the waitlist for REAF 4. This is in no way a commitment to invest, but a way to express your interest in being included in our next Fund. We’ll contact you with more information, invites to Live Updates and insights into the world of real estate investments.