What's keeping you from investing in real estate?

Investing in real estate often gets a reputation for being risky—and honestly, that’s not without reason. Like any investment, there are ups and downs, unexpected expenses, and market shifts that can make you nervous. But here’s the thing: with the right approach, real estate can be a solid, rewarding part of your financial strategy.

The key to overcoming that risk? Clarity. Before you dive in, get crystal clear on your numbers. Know exactly how much you’re investing, what your expected returns are, and what your expenses might look like. This means factoring in mortgage payments, property taxes, maintenance costs, and potential vacancies. When you understand the full financial picture, you’re less likely to be caught off guard.

Next, be honest about your risk tolerance. Real estate isn’t a sprint; it’s a marathon. If you’re someone who gets nervous with market ups and downs, start with smaller investments or focus on neighborhoods with steady growth. Speaking of neighborhoods, understanding the area where you’re investing is crucial. Look for communities with strong job markets, good schools, and amenities that attract renters or buyers. The right location can make all the difference in your investment’s success. Often, homes near where you currently live or have lived recently are your best bet, since you have insider knowledge of that neighborhood.

One of the biggest advantages of real estate is building equity over time. If you look at the last 60 years of average home sales prices* in the U.S., the only significant period where home prices dropped was between 2007 and 2013. For example, if you bought at the peak in Q1 2007, it took until Q3 2013 for your home to regain that value. Outside of that stretch, there hasn’t been a time in the last three decades where owning a home for five years or more didn’t result in building equity. That means, generally, the longer you hold onto your property, the more value you’re likely to gain.

Now, how does real estate stack up against the stock market? Both have their pros and cons, but real estate offers something unique: tangible assets you can see and manage. While stocks can be volatile and influenced by global events, real estate tends to be more stable over the long term. Plus, you have more control: you can improve your property, increase its value, and generate steady rental income.

If you’re thinking about jumping into real estate but feeling overwhelmed, remember you don’t have to do it alone. Our team at Nations Network has experts who invest and work with real estate investors on a day-to-day basis. We can help you run the numbers, give you insight on neighborhoods, and recommend lenders who have special products for investors. 

*Source: https://fred.stlouisfed.org/series/ASPUS