Real Estate Investment Returns

Historically, the real estate investment returns are usually very high. On average, real estate appreciates 4% - 5% annually. This is the US national average but it does not take into account many factors that can affect the return of your real estate investment. Many cities and states experience larger returns whereas others see decline in rate of return of real estate investments.

Your particular community or state real estate appreciation

Although the national average of real estate appreciation is 5%, your particular property may appreciate more or less. Where you live has a big impact on the appreciation of your property.

For example, properties in growing areas may appreciate 10% - 20% while properties in other areas might appreciate only 1%. With the gradual slowdown in the real estate market, the housing prices have dropped and real estate investment returns are not as they used to be. Many homeowners suffer as a result of depreciating market values. Foreclosure rate rises.

Fluctuations in the real estate market

Like other markets, the real estate market also fluctuates. High growth periods could yield 10% - 20% or more whereas moderate growth periods may yield less than a certificate of deposit. During buyers market when prices have dropped significantly in most areas, many people find unattractive real estate investment returns more than good reasons to invest elsewhere.