Oakland
With housing prices soaring in the Bay Area, many investors are wondering if it makes sense to invest in real estate to capture future potential price appreciation. With housing prices now finally having returned to levels relatively near pre-2008 values, it’s an understandable question being asked by real estate investors. The answer on whether it is appropriate to invest in real estate as part of an investment strategy depends on each person’s circumstances. Factors that need to be taken into consideration include liquidity needs, time horizon, and a host of other issues that can only be answered on an individual basis. What is important to keep in mind is that real estate is a capital asset just like a stock and one can make money two different ways from this asset - capital appreciation and income stream. Investing in real estate focus solely on capital appreciation in the considerably riskier endeavor as there is no ongoing cash flow to offset costs. This is not to say that this is not a prudent course of action but the risks should be assessed prior to investing in an asset solely on an expectation that it will rise in capital value. For many investors, rental properties make sense as there is the opportunity for appreciation combined with income streams. As a planning-based firm, Destination Wealth Management, can assess your overall investment portfolio related to your long-term goals including current/future investment in real estate assets. We invite you to learn more about how we can help you determine if real estate makes sense in your portfolio strategy.
