The views on cannabis continue to change: since Coloradans voted to legalize recreational weed back in 2012, seven other states (and the District of Columbia) have followed suit. This trend is likely to increase. In fact, per CBS News, cannabis sales are expected to reach around 23 billion by 2020. In short, people working in marijuana picked a profitable industry.
With this profit comes investment opportunity and real estate is among the safest place to put your money. As the market continues to stay strong, those who don’t invest risk looking back and wishing they had.
There are a variety of benefits to investing. Some of these include:
The opportunity is knocking
The housing crash in 2008 saw banks shutting their proverbial doors to many home buyers. But, with economic rebound, lending has returned. According to Entrepreneur, banks have relaxed many of the rigid standards they implemented nearly a decade ago. If you have stable employment and decent credit, most lenders are willing to work with you on fixed-rate loans.
It allows for portfolio diversification
Investing in real estate offers you the chance to diversify. It does this because real estate has a low correlation with other asset classes. This decreases your risk by, essentially, not putting too many eggs inside a single basket.
It offers a positive cash flow
A major perk to real estate investing is cash flow. Owning a home or office building and leasing it to tenants provides a regular income stream that other investments do not. This flow
offsets the cost of investing as well as the risk.
Appreciation rates are going strong
All across the nation, homes are appreciating, selling in recent months for thousands and thousands more than their original purchase price. However, in Colorado, this appreciation is particularly acute. As reported by The Denver Channel, the Centennial State has one of the top housing appreciation rates in the country. Between July 2015 and July 2016, homes appreciated 9.3 percent.
You can purchase with three percent down
In more trying times, it was impossible to purchase without a large down payment; banks wanted you to invest before they did. Today, three percent is all you need. This opens the door for investors who’ve always seen real estate as a pipe dream, simply because they didn’t have the upfront cash required.
Whether you make your money in the cannabis industry or any other industry, real estate is one of the smartest ways to diversify.
Michaela Phillips is the Vice President of Mortgage Lending at Guaranteed Rate, Inc. Contact Michaela at 303.579.5517, e-mail [email protected] or visit michaelaphillips.com. NMLS:312874.