Using Financial Analysis in Making Investment Decisions

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Investing in Real Estate

U.S. real estate is an excellent vehicle for building retirement wealth. It has superior long-run risk adjusted returns relative to more liquid assets and provides a hedge against inflation. Because it is a hard asset that produces relatively stable cash flows (regardless of stock and bond market conditions), property values are generally more stable than securities. While bonds also produce stable cash flows, real estate, unlike bonds, generates cash flows that rise with inflation. While an increase in inflation causes bonds to decrease in value, an increase in inflation causes the reverse with real estate, an increase in property values.

 

However, there is no free lunch and real estate investing is no exception. Real Estate is much less liquid than securities. It can take months to sell a property and transaction costs are high. For these reasons, an investor should maintain sufficient liquid assets so that the likelihood of needing to sell is minimized. Kensington Realty Group suggests a 10-year investment horizon.

In addition real estate requires much more active management than is customary for other asset classes. The keys to maximizing returns in real estate are local market analysis, risk mitigation, and ongoing active operational and financial management. This is where Kensington Realty Group provides real value to its clients.
If you are retired or nearing retirement and have a significant amount of wealth tied up in real estate, you should consider selling to preserve your wealth, provide liquidity and increase your income. Kensington Realty Group will represent you with the goal of maximizing your investment return.
 
 
Michael Kirch
Real Estate Broker / Realtor / Agent / Consultant 
 
Serving Monterey County and the Monterey Peninsula - Salinas, Gonzales, Greenfield, Soledad, King City, Monterey, Carmel, Carmel Valley, Big Sur, Pacific Grove, Pebble Beach, Seaside, Marina.
 
Serving San Benito County - San Juan Bautista, Hollister.
 
Serving Santa Cruz County - Santa Cruz, Aptos, Soquel, Capitola, Scotts Valley, Watsonville. 
 
Residential Homes For Sales, Investment Property, Commercial Property, Apartments, Land, Business Opportunities 
 
 

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