Survey: Real Estate is the Best Investment

Americans ranked real estate as the best long-term investment, even over stocks and gold, according to a recent Gallup Poll of about 1,000 U.S. adults. Real estate has been the top investment choice for the past two years, and it's lead is increasing over four other popular investment choices.

Thirty-five percent of Americans selected real estate as their top investment choice compared to 22 percent for stocks and mutual funds; 17 percent for gold; 15 percent for savings accounts/CDs; and 7 percent for bonds. By comparison, 34 percent of Americans said gold was their top long-term investment choice in 2011 while 19 percent said real estate.

"As the average sale price of new homes in the U.S. increased from $259,300 in August 2011 to $348,900 in February of this year, the percentage of Americans picking real estate as the best long-term investment almost doubled," according to Gallup. "During approximately the same time span-from August 2011 to April of this year-gold prices plunged from $1,910 to $1,254 per ounce, and the percentage thinking gold would be the best investment was cut in half."

The poll also revealed the following:

• Men are more likely than women to say gold is the best long-term investment. Women tend to favor savings accounts more so than men.
• Those surveyed who are younger than 30 years old were the least likely age group, at 26 percent, to think real estate is the top investing choice. They are most likely to choose savings as the top long-term investment choice.
• Renters (32%) and home owners (34%) are about equally as likely to choose real estate as their top long-term investment choice.

Source: RealtorMag

How You Can Make 21% on Your Money Right Now

I have one question for you: what is your money doing for you right now?    Is your money sitting in the jacuzi of your 0.5% savings account at the bank?  Or is your money getting sick on the zany roller coaster of the stock market?  We're going to do a little case study today where I'm going to show you, using conservative numbers, how you can make 24% on you money right now with NO headache, NO sweat, NO stress. Are you ready? Keep reading below!

Case Study Rentals are HOT right now! No matter how many times I've already repeated it, I will continue to say it again and again, because I guarantee you 1-5 years from now, everyone will be saying, "Jonathan, why didn't you force me to buy a rental property back in 2011!" So here it is: Buy a rental property NOW! Vacancy rates are at record lows, interest rates have NEVER been lower in history, and renters are EVERYWHERE. I'm just going to use conservative numbers that investors would scoff at and say, "I can get much better than that" just to show you that owning a rental property and having someone else manage it WILL make you 20%-30% return on investment. Let's start.     1) Aurora and Southwest Denver have always been places investors have shark-frenzied because of 2 factors: low prices, and high rental rates.    2) But alot of people tell me, "Jonathan, the competition is too crazy. I can't compete with these cash bully-investors buying foreclosures." Agreed. But what if you could - instead of making 40% on your money - make 25% (still AMAZING) by just going up a tiny bit in price point?  It's the old nerd trick of getting away from the bullies - just go where the bullies don't care to go. If investors are spending $80,000 cash for a foreclosed house, spending $10,000-$15,000 fixing it up, and then renting or selling it and making a kill, what if you could buy a house at $110,000, get a property manager to rent and manage it, and STILL cashflow $500/month? My friend, there are still amazing deals like this out there, maybe not the slam dunk that cash investor bullies can get, but cashflow deals that still make YOU a killing that the stock market can't even touch.    3) Conservative case study in Six points: I'm crazy, but just for the sake of argument, let's over-exaggerate ALL the factors to make sure the numbers work.   1.  Price: In Aurora and Southwest Denver, there are several great and even updated 3 bedroom (for families) houses around $110,000 that are NOT foreclosures, short sales, or government owned homes.  So, let's put the price at $120,000 just to make sure.   2.  Rents: There are no 3-bedroom houses in South Aurora on craigslist right now for under $1200/month. So, instead of the market $1300-$1500 rent you could get, let's just say $1200/month.    3  Mortgage: The best way to cash-flow is to use the AMAZING interest rates right now. At 5.125%, your mortgage payment would be $522.71/month with a 20% down payment. Add taxes and insurance it will be $640/month at the most.     4.  Property manager: Figure the standard 10% of gross month's rent for property management fees so you don't have to get calls in the middle of the night, or deal with showings, etc (10% is my rate).  That would be $120/month.    5.  So, after paying mortgage, taxes, insurance, and property manager, you're making $440 cashflow per month (AT THESE OVERLY CONSERVATIVE NUMBERS!), with NO headache about tenants, NO stress about the stockmarket, and extra money in your bank.    6.  What you need: $20,000-$25,000 downpayment per house. At $440/month, you will be making 21% on your investment (if we add $2,000 for maintenance and vacancy rates), or $5280/year, and paying down the loan so you can eventually sell the house, or just pay it off and make $1100/month! Get 2 of these houses and you'll be making close to $1000/month NO HEADACHE cashflow.    -If you have this money sitting in your bank making 0.5% for you, it's time to MAKE IT WORK for you instead!  -If you don't have that much saved up yet, talk to your family, or your friends, make partnerships...you'll be surprised.    I can help you find and buy these houses, and I can manage them for you to get your money out of the jacuzzi and put it to work for you!   People will always need to rent...why shouldn't they rent from you??   Jonathan Ghaly Cherry Creek Properties 720.987.8998

The Wall Street Journal: 2010 - Real Estate Outruns the Stock Market Again

Real-estate stocks are poised to end 2010 with gains that are twice as large as the broader stock market, the second year in a row that REITs outperformed the major stock indexes.

REITs, as measured by the Dow Jones All REIT index, were up 27% as of Tuesday’s close. While that is a smaller gain than last year, when REITs posted gains of 28.5%, the 2010 results handily beat the Dow Jones Industrial Averages, up 11% as of Monday’s closing and Standard & Poor’s 500 index, up 12.86%.
The REIT rally was triggered by investors hunting for higher dividend yields. REIT dividend yields, while low compared to historical standards, are currently around 4% compared to 3.35% on Treasury bonds.

“The REIT yields are very attractive compared to anything else in the market,” said Brad Case, vice president of research and industry information for the National Association of Real Estate Investment Trusts. Since the beginning of the year, dozens of REITs have raised dividends, an about-face from last year when many REITs were cutting or suspending dividends.

Other investors were buying real-estate stocks based on economic fundamentals, basically a belief that commercial landlords will post stronger earnings from rising rents and occupancy in 2011.
Most of this year’s gains came early in the year after a number of REITs were able to successfully recapitalize their companies by selling large amounts of stock and bonds. The recapitalizations eased fears that a number of large companies would be forced into bankruptcy. By the fourth quarter, however, REITs failed to outperform the broader indexes as investors began to fret that stubbornly high unemployment might drag down the industry’s prospects and delay the time when landlords can raise rents. The DJ All REIT index was up 7.2% for the fourth quarter through Tuesday’s close, almost in a dead heat with the 7.3% return for the Dow Jones Industrial Average and modestly trailing a 10.28% gain for the S&P 500.

Written by A.D. Pruitt for The Wall Street Journal, Published December 29, 2010
For full article, click here.