Why Should Women Invest in Real Estate?
Investing in real estate may seem like an intimidating prospect, and some women may shy away from this big-ticket investment option. But investing in real estate can increase wealth over time while creating opportunities for learning and increasing knowledge about the sector. Learn some of the reasons why women should invest in real estate to determine whether this investment tool meshes with your personal financial goals.
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Necessity
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It's crucial for women to invest to counterbalance statistical disadvantages. On average, women work fewer years than men, since some opt to take time away from full-time employment to care for families. This can reduce overall lifetime earnings and smaller pension benefits compared with men, unless savings are augmented through investment, including real estate. Statistically, women earn $0.80 for every $1 earned by men, according to AXA Equitable. Women also tend to live longer than men, increasing their number of retirement years. In situations where a spouse accumulated high medical bills during end-of-life care, a couple's retirement savings may be depleted. Real estate investments can help stabilize total wealth to reduce stressful or frightening penny-pinching for surviving widows.
Diversification
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Women should also consider investing in real estate for diversification. Women may sometimes lack the financial resources or money-related confidence to diversify investments, instead funneling money into a bank savings account and hoping for high interest rate yields. But directing all savings into one type of financial instrument (for example, CDs, the stock market or savings accounts) increases risk. Stashing all savings into a bank account runs the risk of low returns, when money could be more wisely invested in comparatively higher-return investment options. Investing only in the stock market runs the risk of losing savings in a market crash. Instead, diversify investments to include a mix of real estate, stocks, mutual funds and savings accounts.
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Growth and Stability
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Real estate markets offer the potential for growth and stability. Because real estate often represents often higher-cost investments, investors commit to long-term growth. This works well for female investors because of the longer retirement years associated with longer lifespan. Because women tend to be lower-risk investors, the slow growth of the real estate market over time can offer a more assuring, stable market compared with more volatile financial tools; for example, the stock market. Real estate represents a tangible investment; risk-averse women investors may appreciate knowing that their money purchases a physical product rather than a more conceptual financial tool, such as a stock certificate.
Relationships
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Some women tend to have stronger relationship-building skills compared with men; this character strength can help female investors build effective relationships with real estate agents, prospective buyers or banking officials involved with real estate investments. Women sometimes form real estate investment groups to share knowledge, ask questions about investing and research investment options together in a sometimes profitable and socially rewarding group experience.
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References
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