Why Invest In Real Estate?
Real Estate investment is the purchase of future income streams and can offer several advantages over other types of investments, including potentially higher returns, stability, inflation hedging, and diversification. The benefits of Real Estate investing can be bolstered or hindered depending on the market the properties reside in. Louisville, KY is considered to be one of the top 15 best Real Estate investment markets in the country. We believe that along with opportunity zones, a limited supply and Louisville's growing population - Kentucky investors have a great opportunity for a great return on their investment. Additionally, here are some of the other key reasons to consider investing in Real Estate.
Competitive Risk-Adjusted Returns
Based on July 2018 data from the National Council of Real Estate Investment Fiduciaries (NCREIF), private market commercial Real Estate returned an average of 9.85% over the past five years. This credible performance was achieved, together with low volatility relative to equities and bonds, for highly competitive risk-adjusted returns.
High Tangible Asset Value
Unlike stocks, and to some extent, bonds, an investment in real estate is backed by a high level of brick and mortar. This helps reduce the principal-agent conflict or the extent to which the interest of the investor is dependent on the integrity and competence of managers and debtors.
Attractive and Stable Income Return
A key feature of Real Estate investment is the significant proportion of total return accruing from rental income over the long term. Over a 30 year period from 1977 to 2007, close to 80% of total U.S. Real Estate return was derived from income flows. This helps reduce volatility as investments that rely more on income return tend to be less volatile than those that rely more on capital value return.
