Property Returns likely to Exceed Stocks
By Henry Hall, All Property Management
Real Estate will yield the highest returns versus alternative investments over the next 10 years, according to a recent analysis.
Real estate appears to be the safest bet as well, yielding the lowest risk of negative returns and the highest potential upside over the next 10 years when factors such as inflation are considered. The projections were made by Standard Life, an insurance and investment firm, in their influential Global Outlook report for the first quarter of 2013. Standard manages a $250 billion portfolio of investments for themselves and outside clients.
The report projected the expected inflation adjusted returns for stocks, bonds, cash and credit in the US, Europe and Asia. Real Estate investments were projected to have the lowest risk on the downside and the highest return on the upside. At worse, Standard projected that US real estate investments over the next decade would return.25%, after inflation. At best, real estate would deliver 8.75%. By comparison, stock results where projected at a low end of a -1% loss, to as high as an 8% gain. No one can predict the future, and projections with such a wide range of returns are certainly a hedge against eventually being proven wrong, but it is a good indication of how the world's smart money players are thinking about property as the nation rebounds from a real estate crisis.
So if you believe Standard, socking some money away in real estate is probably a good idea for anyone seeking diversification and higher returns. But if you're reading this blog, you probably already knew that.
Standard Life subtitled their section on real estate "Buy Land, They're not Making Any More of It." There's no question that that last part of that statement is correct.
- HOME / CONDO
- Single Home or Condo (Valued up to $300K)
- Single Home or Condo ($300K to $500K)
- Single Home or Condo ($500K to $1 Million)
- Single Home or Condo (Over $1 Million)
- Multi-Family (2-4 units)
- Multi-Family (5-19 units)
- Multi-Family (20-99 units)
- Multi-Family (100+ units)
- Homeowners Association (2-49 units)
- Homeowners Association (50-99 units)
- Homeowners Association (100+ units)
- Condominium Association (2-49 units)
- Condominium Association (50-99 units)
- Condominium Association (100+ units)
- Retail (Up to 9,999 sqft)
- Retail (10,000 - 100,000 sqft)
- Retail (100,000+ sqft)
- Office (Up to 9,999 sqft)
- Office (10,000 - 100,000 sqft)
- Office (100,000+ sqft)
- Warehouse/Distribution (Up to 100,000 sqft)
- Warehouse/Distribution (100,000+ sqft)
- Light Manufacturing (Up to 100,000 sqft)
- Light Manufacturing (100,000+ sqft)
- Parking Garage
- Vacation (1-2 units)
- Vacation (3+ units)
- Other Associations (Hotel, Resort etc.)
- Mobile Home Community