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Real estate to play a big role in U.S. investors’ 2017 strategy

by Andrew Morrell

housing-investment

Better Homes and Gardens Real Estate surveyed 1,000 U.S. investors and found that 89 percent are interested in investing in real estate as part of their investment strategy.  The survey also revealed that 80 percent of investors believe that a real estate portfolio is one of the best financial legacies that they can leave for their family.

Investors and their motivation

The survey revealed that 94 percent of those who have already invested are interested in making another property investment, and that 84 percent intend to make a similar investment; furthermore, two in five said they are planning to make those new investments in less than a year.

From the surveyed investors that have yet to invest in real estate:

  • Approximately 80 percent are interested in investing.
  • Nearly all the Millennial investors (96 percent) are interested, as are 83 percent of the Baby Boomers.
  • Personal real estate investment is more attractive than commercial among Millennials.

The survey also showed that family is the main reason for investing in real estate:

  • For 79 percent of investors, finding a property that they themselves (or family members) could use is a major factor.
  • Out of the 83 percent of investors who are parents, they invested in real estate with their children or grandchildren’s future in mind. Within those investors, 40 percent co-manage and profit from it together; 39 percent manage and profit from it themselves; 35 percent have their children and grandchildren live in the home during college; and another 35 percent use it to fund college tuition in the future.

Only a small percentage (29 percent) of investors look at property flipping as the benefit of real estate investment, suggesting that investor and agent interests are aligned. Bankrate and Princeton Survey Research Associations International had similar findings in a 2015 study; conducted among 1,000 people living in the continental U.S., the survey revealed that real estate is the No. 1 investment option (over cash investments and stocks).

Investors are looking to agents for answers

The top concern for non-investors about real estate investment is their lack of knowledge on the subject. From the Better Homes survey, 42 percent stated they do not know enough about investing in real estate, while 41 percent think it requires too much time.

As a result, 53 percent of those same non-investors expected a real estate agent to advise on managing their investment. Forty-nine percent need guidance on terms, and 47 percent on downpayment advice.

“Through this research, we’ve discovered that a majority of investors, including Millennials, Gen Xers and Baby Boomers, believe real estate is the best way to diversify an investment portfolio,” said Sherry Chris, President and CEO of Better Homes and Gardens Real Estate. “Consumers are starting to look forward and see real estate as a viable investment strategy, and as an industry, we need to help educate and guide these individuals on the right path to achieve this goal.

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