Investing 101

How Rental Income Helps Weather Changing Markets

 

We get questions like that all the time here at RealyInvest. When the stock market is volatile (this means when it’s going up and down and is confusing) it can be disconcerting and even a little discouraging for a new investor. Sometimes it seems that all the money you began to build up in your account just disappears in a barrage of selling on Wall Street.

The first thing to remember is this. We are in this for the long term. The second thing to remember is to not get discouraged. The next thing to really think about is that the kind of real estate we love here at RealyInvest is what is called non-correlated to the stock market. What this means is that the properties we offer as part of our GetRealyReal program are not related to the day to day fluctuations of the stock market.

The stock market can sell off a thousand points and that steady-Eddy Starbucks that you own a shared interest in the land and building will just keep on pouring the coffee and paying the rent.

Just think of it. Maybe some traders who just got hammered on Wall Street may stop by “your” Starbucks to have some Joe and lick their wounds. All the while you are making money...sweet!

The great thing about this is that as they keep paying their rent every month and that keeps paying you rental income every month. It is comforting, re-assuring and financially enriching to you when you see that green ink on your app whenever you check your account status. To be sure, no one can assure you of making money on any investment. With that being said we love these properties because they are not tied to the day in and day out of the stock market and their leases call for steady, increasing rental payments over the years.

While our GetReal program offers Real Estate Investment Trust (REIT) shares that can fluctuate with the market, they are still tied to the underlying value of some really good commercial properties.

We love rental income and dividend income. Dividend income is just the final net income of a REIT share that is passed through to the shareholders (you!).

Again, don’t panic. Hold your portfolio. Build a bottom line of good real estate. These have been, are, and will be the recipe for long-term wealth creation.

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