89 Percent Of Investors Want To Put Money In Real Estate A New Survey Shows

89 Percent Of Investors Want To Put Money In Real Estate A New Survey Shows
By John Triplett, National REIA

A new survey shows 89 percent of U.S. investors are interested in putting their money into real estate to benefit their family in some way and want to be geographically close to their investments, according to a release.

The survey shows 80 percent of investors believe a real estate portfolio is one of the best financial legacies they could leave for their family.

The new survey says that family is a driving motivation behind real estate investments, much more so than property flipping, according to the Better Homes and Gardens Real Estate survey done by Wakefield Research.

Family is reason for real estate investment survey shows

• 79% of investor respondents feel it is important to invest in a property that they could use for themselves or a family member at some point.
• 83% of parents who invest would consider buying a property for or with their child or grandchild to:
  • Co-manage and profit from together (40%)
  • Manage and profit from it themselves (39%)
  • Have their children or grandchildren live in the home during college (35%)
  • Fund college tuition in the future (35%)

“To see consumer confidence of this magnitude is very promising,” Sherry Chris, President and CEO, Better Homes and Gardens Real Estate, said in the release. “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.”

“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,” Chris said in the release.

Real estate investing helps achieve financial success

• Nearly all (96%) of U.S. investors surveyed who have invested in real estate believe their decision has helped them achieve some form of financial success:
  • 52% greater overall financial stability
  • 51% greater long-term net worth
  • 45% greater monthly cash flow
• 94% percent of those who have invested in real estate are interested in making a future investment of this kind.
  • 84% who have invested in real estate indicated that they will make another real estate investment.
    • 2 in 5 planning to do so in less than a year.
• 80% of investors surveyed who have never previously invested in real estate expressed an interest in making this financial commitment:
  • 96% of Millennial investors are interested in making a real estate investment, showing greater interest than their Boomer counterparts (83%).
  • Millennials are more drawn to personal real estate investments (79%) than commercial (49%).

Unlike many other investments that can be made with the click of a button, real estate investments are often complex and require careful consideration, according to the release.

In fact, 89 percent of investors who have made a real estate investment in the last five years feel it is important for a real estate investment property to be geographically close, so that they could either manage or use it themselves.

Non-real estate investor concerns

For non-investors, this commitment can be a deterrent. The survey found 89 percent of non-real estate investors surveyed cited concerns about jumping in on an investment property. Here are the top reasons:

• They don’t know enough about investing in real estate (42%)
• It requires too much time (41%)
• Demands too much starting capital (35%)
• It is “risky” (28%)

So for the non-real estate investor, there is a clear need for real estate professionals and their insights, according to the release, and 30 percent would be more likely to invest if they had access to a real estate investment professional for advice, or resources to explain how to get started.

This need translates into a set of expectations. Approximately 53 percent of respondents expect a real estate agent to advise on managing the investment, as well as provide guidance on terms (49%) and down payment advice (47%).

“The aspiration to invest in real estate is there, yet it is up to real estate professionals to explain the fundamentals and help to serve as strategic sources throughout the process,” Chris said in the release. “Our hope is that this research empowers our industry to provide the resources and develop the necessary information to accelerate this opportunity for both current and future real estate investors.”

About the Survey
The Better Homes and Gardens Real Estate Investors Survey was conducted by Wakefield Research, among 1,000 U.S. investors, between June 30 and July 12, 2016, using an email invitation and an online survey.

Read the full news release here.