Americans Favor Real Estate As Top Long-Term Investment

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According to a recent study by global analytics and advisory firm Gallup, approximately 36% of Americans surveyed believe that real estate is the best long-term investment they can make. 

They rank it above stocks or mutual funds (22%), gold (18%) and savings accounts or certificates of deposit (13%). Just 4% of adults surveyed said bonds are a good investment, and 3% believe cryptocurrency is a smart choice.

"No one gets super emotional about stocks," says Francis Financial President and CEO Stacy Francis. "But individuals definitely get emotional about real estate."

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Real estate offers the potential for long-term appreciation and relatively stable returns. It often serves as a hedge against inflation as property values and rental income tend to rise with the cost of living.

While purchasing real estate traditionally has been reserved for institutional investors or high-net-worth individuals, crowdfunding platforms have opened the door to investors who don't have the money for a down payment on their own rental property. Some platforms allow investors to get started with as little as $10.

Arrived Homes, for example, allows investors to purchase shares of individual rental properties for as little as $100, while the minimum investment on Fundrise is just $10.

Real estate investment trusts (REITs) are another option. A REIT is a publicly traded company that owns, operates or finances income-producing real estate. They provide investors with a way to earn a share of the income produced through commercial real estate ownership without buying, managing, or financing any properties themselves.

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Researching the REIT you're interested in investing in is critical. While REITs offer a great opportunity to diversify your portfolio with shopping malls, warehouses, or office buildings, you’ll feel the impact if you invest in a declining sector or region.

"If there's a REIT and it's investing in shopping malls across the country, and shopping malls are not doing well … you're going to feel that," Francis said. "You're not going to be protected."

In addition to not having to fork over a significant amount of cash, investing in real estate through a crowdfunding platform or a REIT eliminates the time and headaches that accompany being a landlord.

"It's not easy being a landlord," says American Private Wealth President Kashif Ahmed. "There's far more to it than just getting a monthly check."

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