How to Retire Rich with Real Estate Investments
Everyone has a different reason for why they invest.
Some people are planning for retirement. Some are hoping to create a legacy to pass on to their children and grandchildren. Others are saving for that dream house or a once-in-a-lifetime vacation.
But whatever your reason for investing, your goal is the exact same as everyone else: make a profit.
And the stock market is a great place for doing just that. In fact, it’s been called the greatest wealth-building invention in human history.
But if you look at average stock returns over time, they’re not really all that impressive on an annual basis.
A Long Time Coming
According to Investopedia, the S&P 500 averaged an annual return of just 8.6% over the past two decades.
That means you’d make about $86 for every $1,000 you invested at the start of each year. It sounds pretty paltry at first, right?
But the power of compounding allows you to earn a return on your return. Think of it like getting paid interest on your interest at the bank.
So, if you’d invested $1,000 at the start of the 20-year period, you’d be looking at an account worth about $5,200.
Now, that’s a little better. But you could have gotten a lot more profit if you’d invested outside of the stock market.
But how do I invest in stocks outside the stock market, Jason?
Well, you don’t. You don’t invest in stocks. You invest quite literally outside.
Over the past two decades, real estate investments on the whole have outperformed the general stock market.
Commercial real estate returns about 9.5% per year. And residential real estate or diversified real estate investments average a 10.6% annual return.
Again, that doesn’t sound so hot, but when you let compounding do its work, your profits get a lot bigger.
A $1,000 investment in commercial real estate 20 years ago would be worth $6,141 today.
That same $1,000 invested in residential or diversified properties would now be worth $7,500.
Commercial real estate would have increased your profit by over 18%. Residential or diversified would have boosted it by nearly 45%.
Starting to understand why real estate is such a great investment?
How You Make Money
There are a few different ways investors plan to profit from real estate investments. Some you probably already know about.
One of the biggest greed drivers in real estate investment is the hope for appreciation. Basically, you’re speculating that the property you buy for $500,000 today is going to be worth $525,000 next year.
Typically, real estate prices do rise, but there’s no regular path they follow. And as you all remember from 2008, they can go down really fast.
Then you’ve got the house flippers. These are the folks looking for properties in need of work.
They’ll buy a place as cheap as possible, put some paint and drywall up (they hope that’s it, but it’s often much more) and then sell the house a few months later for a profit.
But you’ve got to really know your construction for this kind of investment. If you’ve got to do more than just cosmetic work, renovations and repairs can get very expensive.
And if you can’t find a buyer, you’ve got to figure out something else in a hurry to stay cash flow positive.
Then, of course, you’ve got the investors who are just looking to capitalize on value. They’re looking for that steal of a deal property.
And if you can find a property below market value, you’ve immediately increased your net worth as soon as you close on it.
But these kinds of deals are not easy to find. And the folks doing it are constantly immersed in reports and ready to jump on any opportunity that presents itself. They’re experts and love taking advantage of newbies whenever they can.
Finally, you’ve got the main reason most folks think of investing in real estate: rental income.
I mean, who doesn’t want to be a landlord? Finding tenants that won’t need to be evicted down the line. Chasing down rent payments. Contracting with maintenance companies to take care of the property.
That sounds like tons of fun.
Obviously, I’m being sarcastic. And as a former landlord, I can tell you it’s profitable, but it’s also a massive headache.
But what if I told you there was a way to get all the benefits of being a landlord without renting out a single square inch of space? What if I also told you that you could invest in all of these lucrative types of real estate without ever seeing an acre of land, or even buying any of it, for that matter?
Would you be interested?
Join Wealth Daily today for FREE. We'll keep you on top of all the hottest investment ideas before they hit Wall Street. Become a member today, and get our latest free report: "Retirement Reboot: 5 Quick Fixes for Your 401(k) Plan."
It contains full details on how you can deploy five "quick fixes" for your wheezing 401(k) plan.
Become an Absentee Landlord
There is such a way. And my colleague Briton Ryle and I are going to share it with you, right here in Wealth Daily, in just a few weeks.
You see, Brit and I spend a lot of our time researching investment strategies that help our investors establish steady income streams.
This flow of cash helps them build up real wealth in their retirement accounts. And when they’re ready to stop working entirely, it provides a monthly stipend, so to speak, for expenses.
Investors who do it right can grow their revenue stream so big that they never actually need to touch their retirement savings. Those checks coming in every month pay the bills and leave them with extra left over for fun.
And we’ve recently uncovered several real estate opportunities that will allow you to start your own latent income stream, too.
They span the most lucrative real estate markets. You’ll get exposure to commercial real estate like retail spaces and warehouses. You’ll get access to diversified real estate rented out to multimillion-dollar companies. You’ll even get access to the most valuable real estate asset: farmland.
And just one of these investments has the potential to add nearly $15,000 to your annual income.
Now, there are a lot of loops to close still, and we want to make sure all the information is very clear so that once we open the opportunity, it’s easy for you to claim your spot.
So, we’ve got a little more due diligence to complete.
This is one of the best opportunities we’ve ever uncovered. And I want to make sure every one of you gets the chance to start collecting these rent payments and creating a legacy, too.
We’re hoping to release our research at the beginning of March. So keep an eye out for our emails. And I’ll make sure to send you another reminder as we get closer to launch.
But if you just can't wait and want to get immediate access to our research, click the image below to join the members of our investment community who are already profiting from some of these and all our other amazing finds.
To your wealth,
After graduating Cum Laude in finance and economics, Jason analyzed complex projects and budgets for the U.S. Army. Then, at Morgan Stanley, he led the assistants' team for the North American repo sales desk, responsible for hundreds of multibillion-dollar trades every day. Jason is the assistant editor for The Wealth Advisory income stock newsletter. He also contributes regularly to Wealth Daily. To learn more about Jason, click here.
The Best Free Investment You'll Ever Make
After getting your report, you’ll begin receiving the Wealth Daily e-Letter, delivered to your inbox daily.