Real estate is the preferred mid-to-long-range investment choice of Americans as identified in a recent survey. With the Dow Jones industrial average reaching record highs, it might be expected that the stock market would be the favored choice but that wasn’t the outcome.
Analysis of the report suggests that the popularity of houses may be that they are tangible assets in which you can easily see where your money is actually invested, versus the more abstract and less transparent nature of stocks and bonds.
There are several distinct advantages of homes as investments over other popular alternatives.
- High loan-to-value mortgages available
- At fixed interest rates
- For long periods of time
- On appreciating assets
- With definite tax advantages
- And reasonable control.
Another advantage of rental homes is that most people start with some knowledge of and them as an asset and are already comfortable with them – It’s the same type of tangible property asset as they live in, just fulfilling a different purpose as a rental home. They have a tendency to understand the key components such as value, appreciation, rent, maintenance and financing.