Why Now Could Be the Best Market For Real Estate Investing in Over a Decade

Both active and passive real estate investors have pulled back over the last year. For example, Redfin reported that mom-and-pop investors pulled back by 6% late last year and 13% for condo investments. Anecdotally, I’ve heard this from professional real estate operators as well. I talk to at least a couple every week, and for several years now, they’ve said the same thing: “It’s really hard to raise capital from individual investors right now.” But here’s the thing about retail investors: Because they invest based on “vibes” and headlines, they only start investing well after a recovery. They wait until the headlines are all hunky-dory again, and after assets have been performing well for a while. By then, they’ve missed out on the best opportunities. Don’t take my word for it. Dalbar has studied this for decades, pointing out how retail stock investors consistently underperform the market at large. Over a 20-year period, the S&P 500 earned an average annual return of 8.2%, while the average retail investor earned a quarter of that at 2.1%. Here’s why you should rethink everything you “know” about today’s real estate market and start investing slowly and steadily in real estat...