A net worth of more than 350,000 dollars puts you in the 95th percentile of the wealthiest African Americans. Real estate is the primary investment for African American assets, followed by life insurance policies and secure government bonds. This is because the securities in place for these types of investments make them sustainable in the long term. Get rich quick schemes do not pan out in most cases. Most real estate owned by African Americans is their primary residence, but there has been a trend of owning multiple properties and making them into real estate investments.
What Has Changed in the Last 20 Years
Historically, African Americans were excluded from wealth building opportunities by the unfair system in place. In the last 20 years, however, African Americans have made major strides. African Americans are the most likely group to invest in property, start businesses, and the younger generation is known as one of the most entrepreneurial groups in the nation.
Buying Property as an Investment
The millennial generation is among the most entrepreneurial in the nation. Young adults want to create their own wealth instead of working for someone else. Property investment is a way to gain a stable passive income while bringing more financial freedom and building long-term wealth. Property investment is not like owning a business because people are always buying homes, renting homes, and going on trips. If this is something you can currently relate to, it may be in your best interest to check out this turnkey real estate guide on Roofstock just so you can get a better understanding of what you may want. This way, hopefully, you can make better decisions when buying a property.
The rise of short-term leasing companies like Airbnb has made it only easier to rent them out. When renting however you do need to be careful when dealing with short term leases as you should be cautious of your landlord, keeping your landlord happy but also knowing your own legal rights is crucial, more detail about your rights and tenant insurance can be found by researching on the internet or using the services of trustworthy insurance companies.
As a property owner, you get to make the calls, work for yourself, and improve the property to increase your own net worth. Making a space accessible to renters is the goal and many properties offer the opportunity to either fix it up yourself and take the profit or to buy a property that will keep its value that you can rent out to pay it off. Tenants pay you or a management company and that builds your personal equity through their rent payments. In places like Australia, this market is massive, especially since the 2008-9 financial crisis. People want to rent and those that buy have a unique opportunity to build personal equity. If you are an aspiring property developer and are in the process of renovation works, it is useful to compile a list of contact details for various tradespeople who you can rely on in case of any emergencies. For example, this licensed plumber in quakers hill NSW would be a useful contact for some of the more difficult remodelling tasks that involve your waterworks.
Benefits Outweigh the Risks
The risks of owning property are lower than playing the stock market. Over the last 20 years, single-family home values nationwide have increased an average of 9% and stocks increased an average of 11%. Bonds, another popular choice retained about a 5% increase during the same period. The benefit of becoming a landlord is that income is coming in and your wealth is building every month that you have a tenant. Being a landlord is not an easy task, but the financial benefits are impressive. African Americans are getting in on the market for the stability, the gains, and the wealth growth.
Written by Jennifer Dawson