It would not be surprising if a prospective investor is fearful of putting money into real estate, especially if that investor looks at how the market took a beating these past couple of years.
Jeffrey Hanson of Grubb & Ellis Equity Advisors LLC, however, is not so quick to rule out real estate as a long-term investment.
“One component that differentiates it (real estate) is, it is the one asset class that does not heavily depend on job growth,” says Mr. Hanson in the Investment News Alternative Investments Conference held in Chicago just this Monday.
Hanson also goes on to say that the current demographic trend of an aging population helps make real estate more attractive in the long run.
Hanson also points out possible strengths in rental housing. He points out that the so-called “Echo Boom” generation (aka Millennial aka Gen Y) prefers to delay their home purchases to later parts of their lives. This runs counter to beliefs of baby boomers, wherein baby boomers sought to purchase their own homes as early as possible.
Hanson then goes on to advise potential investors to recommend that investors go with a more diversified portfolio adding 10% in real estate and 10% in managed futures or buy penny stocks instead of the traditional 60/40 in stocks/bond portfolios.
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