At the beginning of 2017, CNBC announced that real estate stock was “underowned”. In fact, that was an understatement, as this stock was being completely ignored.
These days it seems like investors want to sink their money into tech, gold, mining and currencies like Bitcoin. They are less enthusiastic about brick-and-mortar, even though this industry has provided a strong foundation for countless portfolios over the years.
But these investors are missing out. This is an industry that will explode over the next few years and one that is always a safe bet for your money.
It’s harder for a first-time buyer to own their now house than it has ever been. This is one of the reasons so many people refuse to invest in real estate, fearing that home ownership is now for the few and not the many. But people still need somewhere to live and if they can’t buy, they will rent.
That creates a cycle whereby countless students, families and individuals rent homes nationwide, pushing the demand for rentals through the roof. The ones who have the money are able to buy homes in order to rent them out. They are able to profit form this demand, buy more homes, and continue to supply. In time, those students and those families will eventually earn enough to buy homes of they own and get they foot on the ladder.
Don’t think that just because fewer people are buying this industry is dead. As a real estate investor it’s all about how many homes are being build, bought, rented and lived in, and those numbers are higher than they have ever been.
Flipping Foreign Investment
As mentioned above, “flipping” plays a huge role in this industry. Countless entrepreneurs are now turning to the real estate market in order to buy, improve and then sell homes across America. The interest in house flipping has been generated by countless TV shows that cover the subject. House flipping has exploded over the last 5 years and it is showing no sign of slowing down.
It seems to be at its most popular in the North Central region of the US, but it is also huge in the Forth Worth-Dallas region, where a combination of low house prices and an increasingly wealthy local populace has crated the perfect storm.
Some reports coming out of major cities are suggesting that house sales are down and home improvement is up. This is all down to house prices, which is a good thing for investors, but the fact that more homeowners are pumping money into their homes is also good news. Homeowners use top re-modelers to improve their home. In doing so, they pump money into an industry that has a direct influence on the real estate industry, and they also work to increase the value of their own homes, which in turn boosts the industry further.
Think about it: the more people that focus on home improvement, the more this trend takes over. The more we see it on TV, the more we read about it and the more people will look to get involved with “flipping”, investing and buying in general. Home improvement trends may not seem like much, but they often coincide with a huge increase in the national house prices.
Real estate today will be what IBM stock was a couple decades ago. It’s something that you will look back on in ten, twenty years and wish you had a piece of it. It’s something that will always have value and something that will always have a purpose. What’s more, you don’t need to buy a home in order to invest and you certainly don’t need to try your hand at flipping.
Instead look to invest in to real estate companies on the NYSE. These companies build the homes that are being bought and sold in their millions, and if this industry flourishes then so will they. The following stocks are all worth considering for this:
- American Realty Investors: ARL
- CBRE Group: CBG
- Alexander and Baldwind Holdings: ALEX
- Forestar Group: FOR
- Altisource Residential Corporation: RESI