When looking for investments, it is always important to balance risk and reward. For a long time, real estate investing has been a popular investment. Many people are now starting to realize this opportunity, which has pushed people to actively seek out investment opportunities in real estate. At the same time, many people are wondering why real estate is such a sound investment. It is important to look at the reasons why before people decide to look for properties in which to invest.
The Historical Prices of Real Estate
In order to truly figure out why real estate has made such a good investment, it is important to look at the historical prices. Looking at a chart of average home prices in the United States between the years of 1963 and 2007, it is easy to see that the average home price increased every year (with very few exceptions). 2007 was the beginning of a historically large recession which faded within a few years. Then, average home prices started to climb once again until the COVID-19 pandemic caused the market to take a downturn. Because of the predictability of the real estate market, in general, investing in real estate is a sound strategy.
Planning for the Future
Even though the real estate market has taken a downturn recently due to the pandemic, the market is likely to rise again. Therefore, real estate is a popular investment strategy for many who are looking to diversify their investments. It is important to think carefully about which properties to invest in. Investing in real estate provides the opportunity for both steady income in the form of rent along with capital appreciation. With historical prices showing that the average value of a home almost always rises year over year, real estate is sure to be a sound investment strategy moving forward.