Housing stocks are taking a beating this year as the housing market turns over. While some investors are fleeing the real estate sector all together – Toll Brothers Inc. (NYSE: TOL) is down over 30% this year – that could be a huge mistake.
The reality is there’s a tremendous opportunity in real estate right now, and the high priests of conventional wisdom on Wall Street are telling you to avoid it.
But conventional wisdom gets you conventional returns. That’s why we dig into the numbers, analyze every industry, and find the most profitable investments others are overlooking.
We aren’t talking about any sort of short selling or options plays on falling stocks either. There’s certainly nothing wrong with making a quick buck on a trade, but we’re talking about investing in a sector others are writing off.
And making a killing in the process, thanks to a real estate investment that’s crushing the stock market’s returns…
The Real Estate Market Is Still Minting Millionaires
You’ve probably read all about the doom and gloom surrounding the housing market.
Rising interest rates are making home buying more expensive. Fixed-rate 30-year mortgages are charging more than 5% interest for the first time since 2010.
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Mortgage applications fell 5% last week, tumbling to a four-year low.
Housing starts have plummeted 10% this year, hitting a three-year low.
The median home price is down 7% since the start of the year. Redfin Corp. (NASDAQ: RDFN) reported 25% of home sellers cut their asking price in September.
Of course, Wall Street has taken notice and absolutely pounded housing stocks…
This might sound like a bad time to invest in real estate, but think again. If you look at it a little differently, you’ll see it’s actually an incredible opportunity.
And I’m not even talking about buying housing stocks at a discount, though you can certainly do that right now too.
William Lyon Homes and M/I Homes are both active in one sector of the housing market with booming potential. They both specialize in first-time home buyers or upgraders, which could be the next growth industry as younger millennials flee cities for the suburbs. Both companies have excellent financial strength too, so they’re poised to break out the second the market realizes their potential.
But I want to talk to you today about a different, and far more lucrative, way of investing in the real estate market.
If you’d used this method of real estate investing over the 40 years (that’s about how long most people will save for retirement), you’d have crushed the stock market’s return.
Plus, this method doesn’t require you to talk to any real estate agents or learn how to flip houses, either.
It’s as simple as buying the right real estate investment trust (REIT). These equities are known for their cash-rich dividends, but they also routinely outperform stocks, even with rising interest rates.
And the one we’re watching right now blows housing stocks out of the water…
How to Make a Killing on Real Estate without Buying Housing Stocks
You may be thinking that you’ve heard all about REITs. Maybe your broker tried to push you away from them because they don’t grow as fast as stocks. Or maybe you heard they struggle when the Fed starts hiking rates.
But the opposite is true.
“In just about every imaginable scenario, owning REITs turns out better than owning the stock market indexes,” explains Money Morning Special Situations Strategist Tim Melvin.
Over the last 40 years, a REIT index would’ve turned $10,000 into $582,000. That’s an outstanding return, but it’s even more impressive when you consider your neighbor down the street would’ve turned $10,000 into just $197,000 by owning an S&P 500 ETF.
Now, Tim is no stranger to REITs. In fact, you could say he’s a little obsessive.
“Anyone who knows me knows I follow the real estate markets closer than my shadow follows me across the beach,” Tim told us. “When I hear about economic health indicators like commercial real estate pricing, occupancy levels, and rent levels, I become giddy with excitement – no kidding.”
And Tim is always excited about real estate investing. He’s ignoring the rate hikes and diving headfirst into real estate.
That’s why we wanted to show you one of the best REITs you can own right now.
You’ll be hard pressed to find a better buy right now.
There are plenty of reasons why. Alexander & Baldwin owns and manages commercial real estate properties across Hawaii. And if you know anything about Hawaii, you know it’s an expensive place to be.
That means Alexander & Baldwin own some of the most lucrative pieces of commercial property in the United States. The prices are high because people are willing to pay a big premium to visit or live on the islands.
But owning valuable property isn’t reason enough to buy into this newly formed REIT.
A&B is an exceptionally well-managed company with a leadership team committed to the company’s values and being one of the best companies in Hawaii. That’s how they’ve managed to turn a profit for seven years in a row. Now that they’ve transitioned into a REIT, they’re getting an impressive 24% return on equity. The national average is 7.2%.
Wall Street analysts are almost as bullish on Alexander & Baldwin as we are. All analysts covering the company give it a “Buy” rating and price targets as high as $35 a share – that’s nearly a 60% gain over today’s price of $22.23.
There’s no better time to jump into one of the most lucrative investment vehicles on the market.
That’s why Tim’s making a killing on them right now.
It’s part of how he’s earned a perfect investing track record. All 32 of his closed positions are winners. And 85 of his 87 open positions are up.
If you’re not a Member of his exclusive Heatseekers service, where you’ll find access to his top-dollar real estate picks (in addition to three other categories of investment opportunities), then click here to join.
Do yourself a favor and listen to what he has to say now…
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