Rookie Investors Snap Up Real Estate

Jacqui Kenyon
Posted

invest in real estateWith interest rates still at serious lows, people across the nation are itching to invest in property while the gettin’s good.

The bad news is that, according to CNN Money, many Americans are raiding their retirement accounts to fund these real estate ventures. That’s not a good idea!

Adam Bergman, a tax attorney for IRA Financial Group in New York, told the site that one of the reasons behind this phenomenon is that, since the financial crisis, consumers just can’t trust Wall Street. They’d rather have their money invested in “hard assets” they can touch and see, like a house.

But as the housing market recovers, real estate is becoming less and less of a steal.  In Las Vegas and Phoenix, two of the hardest-hit cities during the financial crisis, home prices have seen increases of 17.6% and 23%, respectively. Experts say that real estate investors can expect about a 2% return on their investment—and that’s if everything goes swimmingly with their tenants.

RELATED: Adventures in Real Estate: The Best and Worst Places to Be a Landlord

Although real estate can be good investment, being sure that you’re prepared for retirement is a much better bet.