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Real estate may be a wise investment for millennials

On Behalf of | Dec 23, 2016 | Uncategorized

Missouri residents who are in their 20s and 30s may not have a lot of money to make investments. Even though young people can be more comfortable taking risks than older people, most millennials are too cautious to put the little capital that they have into the stock market. In fact, the average millennial keeps about 70 percent of their portfolio in cash.

The sudden ups and downs that can be seen in the stock market make equities a potentially profitable but very risky investment. On the other hand, commercial real estate investments can be more stable. With the exception of global events such as the 2008 recession that resulted in a housing market collapse, prices of real estate typically don’t react to changes in the economy as dramatically as stocks do. By investing in real estate instead of stocks, people can often shield their portfolio from bumps in the economy.

Many young people don’t even consider real estate as an investment option because it requires so much capital. However, there are new ways to invest in real estate, and some investment platforms offer crowdfunding investment opportunities that begin at $100. Small-time real estate investing is possible today because of regulations that were enacted by the Securities and Exchange Commission that fleshed out the JOBS Act that was passed by Congress in 2012.

An alternative to crowdfunding is purchasing one investment property with a group of people who all know each other. While this type of deal could be profitable, it should be entered into carefully to prevent future disputes between the investors. An attorney may be able to help an investor to create contracts for a commercial real estate deal and determine whether a commercial property has any potential problems.