“They’re not making any more dirt.” While that is true in totality on the planet, they are making more dirt. Areas that were not as attractive 10 years ago are now in the middle of the target acquisition range. In essence, that is new dirt. Land and real estate improvements have been one of the most reliable avenues towards achieving financial security and long-term wealth. Whether you are an aspiring house flipper, long-term rental investor, or a weekly Airbnb proponent, real estate is the foundation for all.
A friend and client of mine began acquiring properties several years ago. Through strategic acquisitions and methodical, disciplined investing strategies, he’s purchased approximately 20 properties. Some of these properties function as an Airbnb. Some are flips while others are long-term rentals. These properties are primarily within the entry price points across the Houston area. Is he worried about what the quarterly earnings are for AAPL, TSLA, or the price of oil? In short, no. While these components can affect the economy short term, real estate marches on.
Many naysayers to real estate will point to the financial crisis of 2008-2010. Rest assured, that was a lending crisis, without proper governance. NINJA loans (No Income No Job Asset verification) are a product of the past. This financial crisis was a result of far too aggressive lending policies which have since been reigned in. Moreover, values today stand well beyond the peak values of 2006. If one purchased during the surge of 2004-2006 and held, you are doing very well today with those real estate assets.
In summary, sound investing in real estate creates a compound effect on your asset’s value. Beyond the favorable tax implications, long-term rentals provide monthly income which covers expenses while the overall value of the real estate increases. As the values increase, refinance cash-outs permit you to leverage equity to add to your real estate investment portfolio. I’ve known more than a few people who have directed their retirement accounts towards real estate acquisitions. Perhaps this strategy is right for you and your family’s retirement goals.