Retirement Investment Options: Real Estate
Developing your retirement plan is an important and at times complex. Some retirement investment options are stocks, bonds, annuities, real estate, mutual funds, venture capital and hedge funds. The list is far from over, believe me. All these options have their merits and demerits, carrying a varying level of risk. The golden principle of economics is always applicable. The return from an investment is directly proportional to the risk associated with it, greater the risk, greater the return.
The complexity of choosing the best investment for your retirement makes it critical that you devote sufficient time for research.
When you develop a retirement plan, it is highly recommended that you create a diverse investment portfolio. Financial pundits generally recommend bonds and stocks in case of retirement options. However, investment in stocks and bonds means higher volatility in return which raises their risk potential. Retirees have a superior alternative, often overlooked. Did you guess it? It is an investment in real estate. There are many real estate companies in Denver.
It is time to get involved in real estate. According to a report by Colliers Global, 2016 was one of the best years for real estate. It revealed that over 50% of professional investors were willing to pour money into real estate in 2016. Below are some benefits of investing in real estate over a slew of other competing options.
Real estate is a safer and more stable for your retirement plan because it is a real asset. With property at your disposal, you do not need to rely on equity in companies, which can be quite unreliable and most of us know that. Due to its brick and mortar nature, a property has the tendency of being a much more stable market, which reduces the overall risk factor associated with your retirement plan.
One of the key benefits that real estate has to offer as a retirement investment has to do with permanence and longevity. Retirement preparation begins early and takes a considerable length of time, similarly when correctly executed; investment in property is pretty much the same. The idea is the generation of stable return, which accumulates over a long period.
Real estate is one of those rare investment avenues that let you earn a reliable and regular stream of income soon after the investment is made in the form of rental income. This rental income can help you in repaying debts and admin expenses.
Another supporter of diversification is the Yale’s Investment Model that states that to be profitable an investment portfolio must contain alternative investments and real estate is among the alternatives. This is equally applicable to retirement plans. Moreover, it is recommended you diversify further within the real estate market in order to guard against volatility in the real estate market and optimize return.
Progress in the area of investment technology has made real estate investment a lot simpler. What made real estate investment a rare feature in retirement plans was the fact that this market segment was notoriously difficult to enter. It needed heaps of paperwork, legal advice and insider knowledge.
However, nowadays it can be managed quite easily online especially through Real Estate Crowdfunding. This eliminates the need for an intermediary, reduces paperwork and enables you to make an investment in real estate anywhere in the world, which leads to more diversification driving down your risk level.
So if you want to ensure the financial safety of your retirement plan call a real estate agent in Denver and discuss your options.