The primary purpose of investing is to create a life-long estate for oneself and one’s family. Most people will want to eventually stop working for a living, preferring to step off the treadmill and relax, travel, enjoy life, or do nothing. Worse yet, many will be forced to stop working — making non-fixed investments a necessity. Even after retirement, they will not have true financial security.
There are other good reasons to consider investing in the “real business” of Residential Income Properties. According to the U.S. Census Bureau the population of the United States is growing, and growing fast: • One birth every seven seconds • One death every 12 seconds • One immigrant (net) every 33 seconds • Net gain of one person every 11 seconds By the year 2035, the Census Bureau estimates that the United States population will grow by 72 million people. The current population of 306 million is expected to swell to 378 million. That amounts to a net population increase of 2.77 million each year for the next 26 years. Based on an average of 2.5 people per household, this indicates a need for an additional 1.1 million new dwellings to meet the demand. In 2009, forecast for additional new rental units construction stands at 214,000 (Realtor.org). Even after figuring a 100% occupancy rate, that still leaves more than 2.23 million people each year, for the next 26 years, without a place to call home. So, where will these people find housing? Will they purchase an existing or newly-constructed home?
Will they qualify for loans or have the down payments to purchase properties? It seems clear that the outlook for investment in Residential Income Property is stable for many years to come.
Furthermore, according to Brookings Institute researchers, massive American construction projects will constitute a $25 trillion development market by 2030, nearly, twice the size of the entire U.S. economy today (14.58 trillion, 2008 est. source CIA Fact-Book). The majority of these funds will flow into ten metro regions called “Megapolitans.” By 2040 two of every three Americans will live in one of these regions:
1. Seattle/Portland
2. Phoenix/Tucson
3. Boston/New York/Washington D.C.
4. Chicago/Detroit/Pittsburgh
5. Sacramento/San Francisco
6. San Antonio/Dallas/Kansas City
7. Raleigh-Durham/Atlanta
8. Los Angeles/Las Vegas
9. Houston/New Orleans
10.Miami/Tampa
Clearly, an investment in Residential Income Property is more than an investment in real estate; it is an investment in a “real business” with a profit-loss agenda and the consequences of success or failure. Real Estate business is not a cyclical enterprise and therefore requires the investor to be visionary, patient, and committed to success in the long term. It is not a get-rich-quick vehicle to wealth and it has nothing to do with timing the market. It requires a hands-on investor with a proactive attitude for managing business affairs, and willingness to learn and apply that knowledge in daily operations. Over time this attitude, along with hard work and acquired experience, will guide the investor toward success using the steady processes described in this site. If followed and executed faithfully, the strategy as outlined will lead to an exponential growth of wealth. Ninety-five percent of retirees in the United States rely on bare sustenance incomes. These retirees did not realize the importance of investing in non-fixed passive investments, such as real estate. If investments do not produce enough to offset tax increases and inflation, they are actually losing money each year. Investing in real estate allows one to stay ahead of taxes and, more importantly, ahead of inflation. Investing in Residential Income Properties, therefore, is a hedge against inflation. In real estate investing, education and implementation of that knowledge is what generates wealth and ultimately, financial freedom. The current “perfect storm” conditions provide a once-in-a-lifetime opportunity. To become financially independent and wealthy, but not for investors who stay on the sidelines. Estate investing is less beneficial and far less profitable for those who wait to buy than for those who buy and wait.
-Gabriel Palotas
