Why Turnkey Rentals Are a Strong Investment During Turbulent Times
Every generation experiences turbulent times. No country is immune. International events often affect U.S. or Canadian families here in North America. Throughout the years, there have been wars, famines and depressions and recessions. The economy experiences ups and downs and reflects the overall mood of society.
Even now, as the public struggles to grasp the implications of viral threats from abroad, stock markets are reeling from the affects and it isn’t showing any signs of stopping. But throughout the years, there is one investment that has withstood the test of time, and that is real estate. Here are some reasons why this is the best time to invest in turnkey rentals.
Real Estate Values Have a History of Steady Increase
Historically, real estate has actually become more valuable during turbulent times. During the period from 1964 to 2004, median home prices increased by an average of 6.4%. There was not one single year where housing prices declined. This steady rise has been observed recently too, barring the mortgage disaster of 2007, and that was largely due to poor lending practices. Currently, housing prices have steadily increased since that crisis, and investors can safely anticipate an increase in property values that is affected very little or not at all by turbulent times.
Real Estate Doesn’t Have a Fear Index
The fear index–officially the volatility index–is a measurement of the volatility of the stock market. It’s called the fear index because it’s driven by the erratic behavior of frightened investors. This behavior manifests as frantic buying and selling based on shocking news headlines. It’s such a common and predictable trading event in the wake of shocking headlines that an official market index was created by the Chicago Board Options Exchange, called the CBOE Volatility Index (VIX). You can actually track the VIX online. As it goes up, stock values decline. Real estate, and especially turnkey rentals, don’t have a fear index associated with them; real estate investors don’t respond erratically to turbulent events, which means your turnkey rental investments hold their value through challenging global events.
People Still Need to Have a Place to Live
No matter what goes on in the world, people still need a place to live. For landlords, that means a steady supply of renters. Especially when times are turbulent and banks become hesitant to lend money, people will turn to rentals instead of buying their own home. For the turnkey investor, this supports a steady supply of renters, which helps to guarantee passive income. In fact, people from all walks of life always need a place to call home. So if your turnkey rental is in good condition, in a reasonably safe area and the rent is affordable, chances are you’ll have no problem finding qualified tenants, even in turbulent times.
Tax Breaks Don’t Change
No matter what the economy is up to or what is happening around the world, your turnkey real estate tax breaks won’t materially change. Sure, they may fluctuate a little during administration changes, but in general, they stay the same through the good times and the bad times. The same can’t be said of stock market investments, which float up and down like buoys in the ocean. No matter how awesome and well-researched your stock pick is, it’s bound to be influenced by larger market conditions like those that directly affect the output of giant manufacturing nations. Basically, you can rely on receiving the same tax breaks you’re used to, no matter what is happening on the other side of the world.
Not only are turnkey rentals a strong investment in turbulent times; they are a smart investment that can help protect you and your family. When currencies are wildly fluctuating in value and no one knows what’s going to happen from one day to the next, you can help maintain your family’s security by investing in turnkey rentals. Turnkey rentals require nothing more from you than a financial investment. From there, you receive passive income, tax benefits and the peace of mind from knowing that your asset is most likely appreciating in value for every year you own it. And isn’t that what you want from anything you invest in?