Survey Names Real Estate as Best Long-Term Investment for 2024

A May 2024 Gallup survey found real estate to be the best long-term investment with 36% of respondents putting it at the top of their list. Since 2011, Gallup has conducted this survey asking Americans to choose between real estate, stocks, gold, savings accounts and bonds. Since 2014, real estate has topped the list, and in 2013, it tied for first with gold and stocks.

Additionally, Americans of all income levels rank real estate as the best long-term investment:

Real estate offers investors a unique combination of stability, appreciation and diversification. This, compiled with numerous other benefits, makes it a lucrative asset class to support your financial goals.

LONG-TERM BENEFITS OF REAL ESTATE INVESTMENTS

Stability and Tangibility

One of the most attractive features of real estate is its stability. Unlike stocks or cryptocurrencies, which can be highly volatile and subject to rapid fluctuations, real estate tends to appreciate steadily over time. This stability is partly because real estate is a tangible asset. It's something you can see, touch, and use, which provides a sense of security that intangible assets cannot. Property values generally rise over time, influenced by factors such as location, economic growth, and population increases. Even in times of economic downturn, real estate typically maintains its intrinsic value better than many other investment forms.

Passive Income Generation

One of the most significant advantages of real estate investment is its potential to generate passive income. Residential properties, in particular, can provide a steady stream of cash flow. Once you have covered initial capital and cash flow requirements, the income can serve as a reliable source of profit. This ongoing income can help diversify your investment portfolio, provide financial stability, and create a passive revenue stream that supports your financial goals.

Tax Benefits

Real estate investors enjoy numerous tax benefits that can enhance their overall return on investment. Deductions for mortgage interest, property taxes, operating expenses, and depreciation can significantly reduce your taxable income. Additionally, when you sell an investment property, you can defer capital gains taxes through a 1031 exchange, allowing you to reinvest your profits into another property. These tax advantages can make real estate investment more profitable compared to other investment types, where tax benefits are often more limited. You can also take advantage of 401(k) and IRA money that you’ve set aside. You can direct institutions to invest your money into an alternative asset class, such as real estate. Your investment will not lose its tax efficient status making it a win-win.

Leverage

Real estate is one of the few investment types that allow you to leverage other people's money to grow your wealth. By using mortgage financing, you can purchase a property with a relatively small down payment and borrow the rest. This leverage means that you can control a more valuable asset with less of your own money. As the property appreciates and generates income, you benefit from the returns on the entire value of the property, not just the portion you paid for outright.

Diversification and Risk Management

Investing in real estate provides diversification to your investment portfolio, reducing overall risk. Real estate values often move independently of the stock market, so when stocks are down, real estate investments may hold their value or even increase. This diversification helps protect your portfolio against market volatility and economic downturns, ensuring more consistent long-term growth.

Community and Personal Benefits

Owning real estate can also bring personal satisfaction and community benefits. As a property owner, you can contribute to neighborhood stability and community development. Whether you're providing quality housing or improving a commercial space, your investment has a tangible impact on the local area. Moreover, owning a property can offer personal use and enjoyment, such as a vacation home, which can enrich your life beyond financial returns.

Conclusion

In conclusion, real estate offers a unique blend of stability, appreciation potential, passive income, tax benefits, leverage, and diversification. These advantages make it an excellent long-term investment, capable of providing financial security and growth for years to come.