Warning, the following reasons to buy real estate as an investment are silly, ominous, speculative and all possibly real. With that being said, lets have fun with it!
Robots Can and Will Take Your Jobs
This is more on the ominous side of things. Gradually and quietly, technology has improved which has made things easier for humans and cheaper for corporations. But so little is said about the net loss to the overall job market. Many forces are at play when looking at the economy and jobs, but I do believe one of the biggest factors in job loss is technology. When I look at residential real estate, most of the new brokerages, apps, and websites are all designed about “improving” the user experience by removing humans and allowing end users to access information or execute transactions without a Realtor. This puts downward pressure on commissions by increasing competition for listings and reducing the number or overall opportunities for Realtors. It’s been a slow process, but eventually the number of Realtors who can sustain a decent pay will drop dramatically in my opinion. Real Estate is not an efficient market, so a purely robotic experience cannot completely take over unless artificial intelligence improves dramatically, but it’s still going to eventually have a severe impact. So for this industry, or virtually any other industry where tech is taking over it’s important to start building your fallback plan by investing in Real Estate to replace your income.
Kids are Expensive
For someone who has children in the college age or getting ready to graduate college, you must understand that your children may choose majors that have no economic value. If this is the case, you may need a stream of income to cover their living expenses that will become your burden when they graduate. In addition, student loan debt and costs of tuition are through the roof. Even if your child gets a decent job, it will be quite difficult for them to save money for a home or do anything meaningful with their earnings other than serve their debt, eat and pay rent. In addition, the job market has been pretty slow to come back since 2008. It may take a lot of time after graduating to find a decent job. Come to your senses and start planning for the worst. Create enough income from real estate to cover any shortfalls that your children may have and protect your wealth or your personal goals by not touching your own retirement capital. A fun way to do this is to buy a building with the actual intention of it being your child’s some day. Name it after them like “Billy LLC” or “Sally LLC” and when the worst happens you’ll already be prepared to pull some money out of the property for them.
Life is VERY Short
When your time comes, what will you say? Can anyone predict their time? The truth is, “Life is like a box of chocolates, you never know what you’re going to get.” So why not start investing for your future to retire earlier and enjoy as many years with little stress and plenty of time to do EXACTLY what you want to do. I don’t know any other better way to create your dream life than by investing in real estate. The relatively passive nature of this investment allows you to spend time doing what you want to do, not what you have to do. Do you know that the average person spends 26 minutes per day to and from work? Let’s make that an even hour. Lets assume a 40 hour work week with 5 hours added on for commuting. Let’s assume you wake up at 6am and go to bed at 9pm meaning 15 hours in each day available for pure “me” time. Let’s crunch the numbers:
15 hours x 7 days = 105 total hours awake for possible enjoyment or HAPE (get it?)
(8 work hours + 1 commute hours + 1 hour of preparation + 1 hour of dwelling mentally on work) * 5 days = 55 total hours working, commuting or preparing for work
55 Hours Working / 105 Hours Available to Enjoy = 53% of time awake working
If you knew that until you were 65 you had to work and that more than 50% of your life would be spent working would you do it? Would you do something to prevent this from happening or reduce the age at which you retire? I certainly would and HAVE! Would you ever take that risk that you may never live to see retirement? I know I wouldn’t. In summary on this one, either do something you love and you’ll never work a day in your life OR start investing in real estate and join the club of early retirees living lives that most only dream of.
People (and Robots) Have to Live Somewhere
The world is expected to change at an exponential rate in the future. Technology goes faster and faster and at some point it’s just impossible to keep up with. The world seems to get crazier and crazier as time goes on. Nukes this, Kardashian that, it’s all so distracting, worrisome and confusing at the same time. So for the simple fact that humans and robots take up physical space on this earth and space on earth is finite, owning land or homes or warehouses etc will be worth something no matter what happens. If the economy drops out, sure stocks will fail, companies go under, jobs get lost but people will still need a place to live or house livestock, equipment robots etc. Owners of property and land will still be able to command resources for shelter because it is a basic human need. So, as all ships rise, your real estate will rise, as all other ships sink, let real estate be your life boat.
Hasta la vista, baby.