When did investing in real estate get so popular

Question

All

Now that I'm a member here and doing my research I see how many people are involved in real estate investing. I know this has been a popular strategy for many for a long time but I'm wondering if this has exploded into a bigger market for new investors the last several years?

Jean Bolger · Answer

Plus, everyone sees the world through the lens of their current focus. You are now looking into real estate investing, so you see evidence of it everywhere. Try thinking about buying a particular model of car, and see how many of those suddenly seem to be on the road when you're driving! There will always be other investors, but don't feel like it's a big race or competition. There are plenty of deals for all. Research, set a plan, stick to it!

Jose Reyes · Answer

TV Shows showing deceiving profits and many times flat out lying. I think regular folks really got fixated on how much money TV investors appeared to be making, as well as how fun and easy it appeared to look. But it's TV, it's 90% scripted. When a few of the TV flippers grew an audience, they geared toward selling education. And that is a huge business. You tell the masses you can invest with no money, no credit and virtually no real estate experience, and make great money, people will throw there money to learn those secrets. I've met a ton of seminar investors, and usually they are very motivated out of the gate, but then quickly fizzle once they see how competitive this business really is.

Bill Gulley · Answer

RE "investing" or acquiring land to profit has been around awhile, about the 12th century. The bubble bursting has drawn vultures on a national scale, one's loss is always another's opportunity. I have seen BP explode in the last year with new interests, probably has much to do with people trying to find a job and then not finding one. Most everyone, guessing 7/8 of 10 here are new to investing, just a guess from seeing introductions and forum activity. :)

J Scott · Answer

There were a LOT of investors up until the crash in 2007...then very few investors from 2008-2012 (and those few made a lot of money)...and now lots of investors again now that the market has improved.

Joel Owens · Answer

Ron when a recovery starts hitting the news the herd mentality kicks in. Long term investors go on sound financial decisions not what's HOT etc. That is speculative buying. Two things motivate people to act which is a fear of loss and expectation of a gain. If people think they will lose out on something many will act. expect in the coming years for more news about an RE recovery. You have to stick to your plan regardless and ignore the noise.

David C. · Answer

I expect taxes to go up and interest rates are currently low. Those 2 things make me think of real-estate as a smart investment strategy. Leverage up with low rates and enjoy the benefits of depreciation to reduce the tax impact of the positive cash flow. Also - I think the pool of residential renters will be 'high' for a long time due to people's credit damage from the housing bust. Also the cult of 'buy as much house as you can afford' has been damaged by the real estate bust, many young people think house buying is 'dumb'. They will make great customers for investors for a long time. Also, the banks are still working through a backlog of short-sales, foreclosures, etc... so inventory is 'high'. Apparently this varies by market quite a bit, and large investment firms buying piles of homes are soaking up some of the excess supply.

Jerry W. · Answer

The housing bubble burst scared many out of the market and unfortunately many folks bought personal residences they couldn't afford and they lost them when interest rates went up, and the recession hit. With lots of houses for sale cheap and interest rates dropping and the stock market paying nothing for returns, real estate has become very popular again

Thierry Van Roy · Answer

Another aspect is REI being considered more recession proof than paper assets. Stocks have gotten discredited after two wipeouts in one decade (a lot changed as well, but that's a different story) and low interests mean low yield on funds, the safest being with negative real interest rates even. Some markets have in fact never gone down from 2009 onwards because of the crisis, paradoxally. Then again, one thing will never change and that's the average investor's amateurism.

Sean Kuhn · Answer

@Jean Bolger That analogy with the car is great. So true with many different things.

Ron Jones · Answer

Great points by all. I just love a smart crowd :)