Income investing is making a comeback as individuals seek to supplement their retirement income beyond social security. Traditional investment plans have underperformed in recent years, prompting a shift towards alternative strategies.
Real estate, particularly multifamily properties, has emerged as a valuable addition to investment portfolios. Offering high returns and acting as a hedge against inflation, real estate has consistently outperformed other investments.
As income-focused investors look for stable and profitable options, 37th Parallel Properties, a reputable real estate acquisition and asset management company, provides a compelling solution.
This article explores the resurgence of income investing and the advantages of investing in multifamily real estate.
Key Takeaways
- Social security alone may not be enough to sustain one's lifestyle, highlighting the importance of supplementing retirement.
- Traditional investment plans, such as fixed income and equities, have not performed well in the last twenty years, necessitating a reevaluation of investment strategies.
- Real estate has been the best investment in the last two decades, offering attractive returns, decreased risk, and increased stability.
- Multifamily real estate investments have emerged as a valuable addition to portfolios, outperforming bonds in terms of recurrent income and acting as a hedge against inflation.
Importance of Retirement Supplement
Supplementing retirement income is crucial, as social security alone may not be sufficient to sustain one's lifestyle. It is important to have a diversified portfolio and engage in long-term planning to ensure a comfortable retirement.
Diversification provides benefits such as reducing risk and increasing the potential for higher returns. By spreading investments across different asset classes, such as stocks, bonds, and real estate, individuals can mitigate the impact of market fluctuations and maximize their income potential.
Moreover, long-term planning allows individuals to set clear financial goals, create a budget, and allocate resources accordingly. This ensures that they are adequately prepared for retirement and have enough income to cover their expenses.
By considering these factors and incorporating them into their investment strategy, individuals can secure a stable and prosperous retirement.
Traditional Investment Plans
Traditional investment plans have underperformed in the past twenty years, with inconsistent returns from stocks and bonds and a decline in stock market returns since the 1980s and 1990s. The traditional advice of maintaining a portfolio of fixed income and equities has not yielded satisfactory results.
Stock market returns have been on a downward trend, while bond market returns have also been depressed. This has led to a reevaluation of investment strategies and a search for alternative options. One such alternative is real estate, which has proven to be the best investment over the last two decades.
Adding real estate to a portfolio has shown to increase returns, decrease risk, and provide stability. In particular, multifamily real estate offers high returns in a lower-risk asset class and acts as a hedge against inflation. This has led many income investors to replace their bond investments with multifamily real estate.
Real Estate as a Savior
Real estate has emerged as a viable solution for investors looking for alternative options to traditional investment plans. In the last twenty years, real estate has outperformed both stocks and bonds, making it an attractive addition to portfolios. Not only does real estate offer higher returns, but it also decreases risk and increases stability. Multifamily real estate, in particular, has shown high returns in a lower-risk asset class. Additionally, real estate acts as a hedge against inflation, providing protection against the eroding effects of rising prices. Bonds, on the other hand, carry inflation risk, making real estate a more favorable choice for income investors. Many income investors have replaced their bond investments with multifamily real estate to take advantage of its attractive returns and inflation-hedging properties.
| Real Estate Performance | Inflation Hedge |
|---|---|
| Outperforms stocks and bonds | Protects against eroding effects of rising prices |
| Offers high returns in a lower-risk asset class | Acts as a hedge against inflation |
| Decreases risk and increases stability | Bonds carry inflation risk |
| Attractive alternative to traditional investment plans | Many income investors have shifted to real estate |
Advantages of 37th Parallel Properties
37th Parallel Properties has established itself as a leading private real estate acquisition and asset management company. With a track record of 100% profitability, this company offers advantages for income-focused and blended return investors.
Here are four key advantages of investing in 37th Parallel Properties:
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High Returns: 37th Parallel Properties specializes in large A/B grade multifamily apartment buildings, which provide attractive returns for income investors. Their investment strategy focuses on generating recurrent streams of income, allowing investors to protect their capital and provide for future generations.
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9% Annual Preferred Return: 37th Parallel Fund II offers Class A shares that provide a 9% annual preferred return. This preferred return ensures that income-focused investors receive consistent and predictable income from their investments.
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Lower-Risk Asset Class: Multifamily real estate investments offered by 37th Parallel Properties are considered a lower-risk asset class compared to other investment options. This lower risk profile makes it an appealing choice for investors seeking stability and income generation.
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Professional Asset Management: 37th Parallel Properties employs a team of experienced professionals who actively manage and optimize the performance of their real estate assets. This professional asset management approach helps maximize returns and mitigate risks for investors.
Overall, 37th Parallel Properties offers a strong track record, attractive returns, and professional management, making it an advantageous choice for income-focused investors looking to supplement their retirement income.
Frequently Asked Questions
What are some strategies for supplementing retirement income besides relying solely on Social Security?
Supplementing retirement income can be achieved through various strategies. These include investing in income-generating assets such as real estate, diversifying investments, maximizing employer-sponsored retirement accounts, and considering part-time work or freelance opportunities.
How have traditional investment plans performed in the last twenty years?
Traditional investment plans have not performed well in the last twenty years, with stock market returns declining and bond market returns being depressed. A performance analysis reveals inconsistent and unsatisfactory returns for these investments.
What are some alternative investment options to consider instead of stocks and bonds?
Alternative investment options to consider instead of stocks and bonds include real estate, particularly multifamily properties. Real estate offers high returns, acts as a hedge against inflation, and provides stability in a lower-risk asset class.
How does real estate act as a hedge against inflation?
Real estate acts as a hedge against inflation by providing rental income that can be adjusted to keep pace with rising prices. The housing market tends to appreciate in value over time, further protecting against inflation.
Are there any risks associated with investing in multifamily real estate properties?
Risks associated with investing in multifamily real estate properties include potential vacancies, tenant turnover, maintenance costs, property management challenges, and fluctuations in rental income. Effective property management is crucial to mitigate these risks and ensure profitability.