Of the investor-friendly possibilities, real estate has some particularly welcoming attributes that have kept it perpetually close to investors’ hearts (and portfolios). This is particularly the case whenever tenuous national and world affairs make the future unnervingly hard to predict.
Forbes magazine is one of the foremost sources that knowledge-thirsty investors consult for ideas and commentary about productive destinations for their extra investment capital, and some of those ideas recently surfaced in a piece on why real estate is “investor-friendly.” They pointed to five major characteristics that continue to attract investors:
1. Volatility. Henderson landlords have a degree of protection from the kind of volatility that the stock and bond markets frequently experience because rental rates are by their nature more stable over time. Globally, even international investors find U.S. real estate markets to offer relatively safe haven in troubled times. Forbes also notes that real estate investments offer insulation from price movements “since returns are derived from rental income in addition to price appreciation.”
2. Inflation. Any Henderson investor who has been around for a while knows how inflation can be a real investment-killer. Research points to the price-raising flexibility that real estate investments embody—but you don’t need to be an academic to know that everyone expects rents to rise when the cost of living does. When inflation rears its otherwise unwelcome head, commercial real estate investments have “the potential to become more profitable.”
3. Returns. Last year, global economic growth slowed for most kinds of investment assets, but real estate was an exception. Rising rents alone would have done the trick (but underlying appreciation also didn’t hurt).
4. Diversification. As an injection of a different asset class, real estate is a portfolio-strengthener. Spreading risk is one of the bedrock principals every Henderson investor learns from the start—a real estate investment does the trick.
5. Tax benefits. The income from a rental investment in Henderson can be partially offset by depreciation and loan interest “that can add up to a substantial tax break.”
This spring, the current listings offer any variety of such investor-friendly possibilities. When you decide that your own investment portfolio might benefit from the stability and other advantages that distinguish Henderson real estate investments, I hope you won’t hesitate to give me a call to investigate!