Many people think about where to invest their money, in which industry or area to invest, how to make a return and profit from the investment. One way to achieve this is to invest in real estate.
Investing in real estate has always been a business that has brought both satisfaction and profitability at the same time. The real estate market is broad term and includes:
- Residential real estate (resale of houses and new homes, family houses, holiday homes, duplexes),
- Commercial real estate (shopping malls, hospitals, medical buildings and offices),
- Industrial real estates (construction of buildings, estates and warehouses),
- Land (vacant land and farms).
Why invest in real estate?
Compared to other investment and investing money, investing in real estate has more advantages, and we will look at some of them.
- Passive income
Passive income is one of the advantages that most influences the decision on this type of investment. Namely, for all those who do not want to spend their days in the office during normal working hours from 9am to 5pm, investing in real estate is very attractive. Investing in real estate, especially in rentng real estate, can provide a steady cash flow. It is a way to earn while you are on vacation, retired or doing other jobs at the same time.
“Don’t put all egs in one basket” is the basic principle of diversification, and divesification is a key part of any investment strategy. Diversification represent diversity. The essence is in its optimization in such a way the investments are distributed so that, in case of bad effects achieved by one part in which we have invested, the other part can “cover” that deficit with its growth.
- Physical asset
Property as a physical asset offers some kind of protection against inflation, because it can be cashed in through rent. Real estate is considered an “alternative assets” and as such can provide stability during a market crash.
However, the pandemic that hit the whole world and which affected many aspects of our lives, as well as the entire world economy, also affected real estate, and thus the investment in the same.
Return to pre-pandemic investment levels
According to the Wall Street Journal, the United States is facing a historic shortage of housing: “At the end of July 2020, there were 1.3 million existing single-family homes for sale, the lowest number for any July in 1982 data, according to the national association of real estates”.
This chart shows the number of homes for rent in the U.S., in the thousands. The begining of the decline of that number is evident already at the beginning of 2020, while it dropped drastically in the second quarter of the same year. In the following quarters, an increase in that number can already be seen, which means that the real estate market is slowly but surely returning to normal.
A similar case is with the sale of apartments in the U.S. In May 2020, that number was the lowest since January 2018. However, we see a sudden jump as early as June 2020. The current sale of apartments in the period from June 2020 to March 2021 is even higher than in previous years for which data are presented.
Faced with the Covid-19 pandemic, many investors have decided to shift their investment from commercial to residential real estate. In any case, investing in real estate is a profitable business, as homes becomes an even more important part of our lives during a pandemic.
How to invest in real estate in the US?
Whether you are already doing business in this field or you are new to this market, AMR Global Advisors works with partner company Black Mountain Group that provides investors, partners and lenders with outstanding and secure investment opportunities. Get your investment process easy as much as possible through modern technology and transparency.
Black Mountain Group operates in the US market, and you can read more about their projects at www.blackmgroup.com. BMG’s management team has decades of experience in investing in real estate in successful development, real estate management and constantly monitors development trends.