Corder and Associates is your trusted source for buying and selling recreational properties including farms, ranches, hunting and vacation properties throughout Montana and Wyoming.

Corder’s Corner

Is Investing in Real Estate Still a Good Idea?

While I suggest diversifying your investments in your portfolio, there is no better place to park your money than investments you can live in and enjoy! When you invest in your surroundings, you invest in yourself! Investing in real estate can offer several advantages over other types of investments. For example, over time, real estate has the ability to increase in value and produce cash flow from rental income. Furthermore, owning and managing a ranch provides much more than an investment; it provides a rewarding experience in which you can thrive in the wide-open rural spaces and participate in the simplistic farm and ranch lifestyle. Ranch and farmland appreciate at a higher rate and can even bring in profits from the products produced by livestock raised on the land.

An investor can help you find ways to protect yourself against significant losses by including asset categories with investment returns that move up and down under different market conditions. In such cases, when one asset category does well another tends to have average or poor returns. History supports the idea that the returns on the three major asset categories, stocks, bonds, and cash, have not moved up and down at the same time. Thus, by investing in various asset categories, you can counteract your losses in one category with better investment returns in another asset category.

Because real estate is a bankable asset, you can always use it as leverage providing you with more movement and opportunity in investing. Investing in real estate does not tie up a lot of cash. You can put down as little as 10% and then utilize the bank’s money to grow your investment. With today’s low interest rates, it is not only smart but an easy way to make money. Unlike the stock market where many factors are out of your control, your investment in real estate cannot disappear overnight. There is an inherent demand for real estate as well whether the land the land produces a product such as coffee or supports a home or an apartment building. No matter what business you have, you will always need land to put it on.

Building wealth by investing in real estate is a solid resolution while maintaining an understanding of the market. Those that lose money in real estate do so because of purchasing at the height of the market and then selling at the wrong time. You can also risk poor return by taking too much equity out of their home and leaving no profit margin for when they sell. It does often take time to see large appreciations, but if you hold on to your investment in real estate until the time is right, you will see profitable returns and make your investment worth it. Many millionaires still agree today that owning real estate was what gave them the cash assets to build their fortune.