What belongings do you have to put money into throughout a recession? Traditionally actual property is a hedge towards inflation, however additionally it is very recession proof as an funding in comparison with shares, bonds and different funding alternatives. Actual property has appreciated throughout 5 of the final 6 recessions and buyers can acquire lease (i.e. dividends) from funding properties on a month-to-month foundation.

Though we’re probably in a recession at the moment, dwelling costs are nonetheless appreciating making actual property an amazing funding together with shares that pay dividends like utility and power shares. The inventory market is down whereas on the identical time actual property values have continued to rise. Whereas there have been individuals involved with a housing crash, there isn’t any proof that an actual property market crash is inevitable, truly the other. The housing bubble hasn’t truly occurred and owners have essentially the most fairness in historical past.

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10 COMMENTS

  1. Real estate is about a third of our portfolio. And right now I'm glad we have it! Kinda wish we had more. But we also get income from dividend paying stocks. We used to own and manage a rice farm property in California but after a death in the family we had to sell it. But that was a great thing to have and was another source of income not correlated with the stock market. Not sure about reverse mortgages. We help an elderly lady that did a reverse mortgage 20 years ago I think and she has outlived the payment schedule. She can stay in the house until she passes, but she is not getting anything now while the house has appreciated quite a bit. She told me the house will go to the bank when she dies.

  2. Amen to the reverse mortgage, Oana! We're within a few weeks of closing on ours. Not only will we eliminate our house payment (will save us $27K/year), we also end up with with a $300K line of credit. I'd need a $45K/year raise to net $27K. And like you said, as long as we live in the house we don't have to repay the loan and all proceeds are tax free.

  3. Agree, a home is an asset that will appreciate over time (eventually)..but not in the next 2 years..that is the point…be careful, you can have a much better deal in a year for your investment.

  4. While fixed rate mortgages do remain the same unfortunately the PITI amount doesn’t necessarily hold true. The increase on my escrow statement this past January for property taxes and insurance more than ate up the 5.9% Social Security raise I got the same month. I’ll be looking through squinting eyes at next year’s escrow statement. One thing they can’t take away from me though is my fixed rate of 2.25% and in today’s market of revolving door internet rate hikes that’s priceless. And in the meantime the equity train just keeps on rolling. Good job guys!

  5. I love the "they" aren't building as many new homes. My Grandparent would say "Who are these "they" people?" We've gone so far beyond the concept of owner-built.

  6. Most people look at only one side on the equation…income. How can I keep up? There is the other side too…spending. Most people see spending = enjoyment. More we spend the happier we are. Right? I certainly thought that for most of my life. Studies say no

    20 years ago I got made at the cable TV company and cancelled it. OMG what will I do? I was scared. Funny thing happened…I was happier. WTF? That caused me to try doing without other things…happier and happier. Only internet did I dislike not having.

    Although there's been inflation for these 20 years my total spend has stayed the same, average of $600/mo (I know that seems insane) while my house has appreciated an average of $2200/mo.

    So yeah if a person wants to keep their net worth higher than neighbors investing is important. But dropping out can work too.

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