Are Real Estate Investment Groups Poised To Outperform The Stock Market Over The Next Five Years?

Are Real Estate Investment Groups Poised To Outperform The Stock Market Over The Next Five Years?

Both real estate and stocks are potent investment channels. There are people who invest in both or either of the two. But recently, there has been a surge in the number of people buying real estate. And real estate investment groups are making it easier for these people to realize their real estate investment goals. In this article, we’ll discuss the reasons why more people are showing increased keenness in real estate. But before that let’s briefly understand what a real estate investment group is and what it does.

What is a Real Estate Investment Group?

A real estate investment group is basically an entity that purchases or creates a pool of properties to sell them as rental properties to potential investors. The group locates tenants and handles property-related maintenance and other tasks. For the service, the group receives a portion of the rental money investors make. These investment groups deal with a variety of real estate assets such as hotel real estate investment and mixed use real estate, to name a few.

Millennials Prefer Real Estate

Close to 55 percent of millennials are keen on investing in real estate. A research study carried out by Fannie Mae revealed almost 85 percent young Americans prefer real estate over stocks. Only 25 percent thought stock market investment is the best. Several other surveys are also shifting the pendulum in real estate’s favor.

Millennials, who currently represent the biggest generation in America in terms of population, are choosing real estate over stocks and bonds or commodities because the majority graduated from college during the subprime mortgage crisis and have first-hand account of the financial hardships that are identified with the Great Recession. Most crucially, the stock market came crashing down right in front of their eyes.

Real Estate is Real Investment

Real estate can be physically touched and felt. This tangible nature of real estate makes investors feel they are holding on to something real. This tangibility also means it’s difficult to be duped or cheated with real property. The tangible asset would not disappear all of a sudden and none can snatch it away from the rightful owner physically. Before buying, real estate can be physically inspected and verified. And most importantly, a house is among the three basic necessities of human life.

Other Real Estate Investment Benefits

Other benefits to a real estate investment are tax deductions, the ability to sell a property via a 1031 exchange. A 1031 exchange lets the investor sell his property, reinvest the funds realized in a fresh property, and defer capital gains taxes in the process. Besides this, there are quite a few other real estate benefits that cannot be quantified but experienced.


Millennials are increasingly growing fond of real estate investment groups. And the trend has only begun. In 2007, close to 66 percent of American investors invested in stocks. Fast-forward to 2016 and the number has been reduced to 50 percent. Though stock market investing is still the most popular investment channel in 2017, this scenario may likely change in the next 4-5 years since several new-gen investors are turning to the more investor-friendly real estate market.