Why Invest in Residential Real Estate? Why Now?

While other types of investments zigzag, real estate has a reputation for staying steady. Residential income-producing real estate offers a lucrative return on your investment that has a proven ability to deliver superior income to investors year after year. It is also a risk-adjusted return that allows you to diversify your portfolio without sacrificing return potential.

But, why now? That is the big question, right? Well, it’s because in 2006 the US was at its height of building at about 1.5 million units per year. Then, building virtually stopped between 2006 and 2013 with the Great Recession. Despite the lack of housing starts, our population grew 7% over the same time.

Then, according to industry reports we started to see a rebound in 2018 with 1.1m units, in 2019, it was reported 1.29m units and in 2020 1.38m new builds were reported. And, according to the National Builders Association, 1.64 million builds are predicted for 2021.

But, as of today, the building industry has still not rebounded to those number of units. In fact, construction of new homes in the past 20 years fell 5.5 million units short of long-term historical levels, according to a National Association of Realtors report. That represents a very significant number over the past 20 years and has led to the housing shortage we currently find ourselves in.

This highlights one of the fundamental reasons we started the Ruthian Investment Fund, the ever-shrinking supply of housing. It’s also led to a nationwide rent increase of 5.2% year over year, which is why Ruthian has a full-service management company with 60+ years of property management experience that allows us to control costs and identify the right tenants.

So, why now. Despite the lack of housing, our population continues to grow. Population increases and very little building is a basic supply and demand problem. Also, rents are on the rise with no decline in sight.

For more information about Ruthian, go to www.ruthianllc.com or email us at invest@ruthianllc.com.