To say the investment market is unsettling is an obvious understatement. The
market is down 8% in the last ten days and the news doesn't give much hope that
things are going to get better in the near term.
Preservation
of capital is probably today's most important investment consideration and
making a profit would be a bonus. Of all the conventional investment
alternatives like stocks, bonds, mutual funds, gold, commodities, CDs and
annuities, housing is the best asset class in America.
Homes have had a 30% to 40% price correction in the past four years. Mortgage
rates are at near all-time low rates with 30 year terms available for investors.
Rents have increased significantly over the past two years while vacancy rates
have decreased. People will always need a place to live.
Five year certificates of deposits earn a little over 2% but rental
properties are yielding eight to ten times more than that. Income properties are
tangible assets that have benefitted dramatically in inflationary times. Cash
assets can be devastated by inflation and diversifying into income properties
can provide real protection.
Single family homes offer investors the opportunity to borrow large
loan-to-value mortgages at fixed rates for long terms on appreciating assets
with tax advantages and reasonable control. Investing in rentals can provide
stability, safety and a higher rate of return.
