I realize real estate as an investment vehicle is in the dog house these days.  Pick you favorite news media source and you will hear negative news about the real estate industry at least once a week if not daily.  The reality is real estate is similar in some ways to other investment vehicles like stocks.  Real estate, like stocks, has a history of ups and downs.  Investment professionals call this volatility.  If you can't handle the thought of volatility, you better start stuffing your mattress with cash and hide in your bunker.  Considering the decline of the US dollar abroad and the constant threat of inflation, storing your cash in your mattress is probably not such a hot idea. 

I’ve always thought real estate was a respectable long-term investment.  To be sure, other investment options have return rate trends that exceed real estate.  But are those options as much fun?  Here are some real estate characteristics I find attractive:

·         It does not go bankrupt   

·         It is tangible and can have many uses

·         The typical owner can exert strong influence over its value

There are many other desirable characteristics.  I only wanted to highlight a few that some people tend to forget.  Can you hunt, fish, water ski, plant a garden, throw a party or build a structure on your stock investment? 

You can go online and search through hundreds of articles and websites that discuss the pros and cons of real estate investing.  I don't consider myself qualified to go into much detail.  I just want to present you with some highlights of some of this information and you can do your own research and come to your own conclusions.  One website called www.EquityScout.com summarized some interesting data about the growth in the value of a $1 investment in stocks vs. real estate over the last 20 years into this graph:


Real estate as a whole has not exactly set the world on fire.  The leveraged real estate dashed line reflects the fact that most people finance their real estate purchases with other people’s money.  Of course, other types of investments can also be leveraged.  Notice the difference in price swings.  Real estate appears to be much less volatile than stocks.  What this graph does not highlight is the fact some niches within the real estate market see more aggressive appreciation than others.  Water front property is one of those more aggressive niches. 

As with almost any form of investment, timing and location are critical success factors.  Smart real estate investors seem to follow the demographic trends and predict where the next wave of growth is going to take place.  I certainly can’t guarantee all investments on Lake Sinclair will make money, but there are some favorable trends and characteristics specific to Lake Sinclair that could increase an investor’s chances of experiencing a positive outcome.  These characteristics and trends include:

·         Fresh waterfront property is a scarce resource

·         Lake Sinclair continues to be one of the lowest priced larger lakes in the region

·         Lake Sinclair is drought resistant and typically has limited water level fluctuations

·         Continued population growth in the warmer weather states

·         Baby Boom generation retirement, relocation and second home buying activity to warmer weather states

I expect the Baby Boom generation will have the greatest impact on development growth at Lake Sinclair over the next 15 years.  Many of these folks who come to Lake Sinclair should be in a position to spend above average amounts on their primary or secondary residents.  Historically, Lake Sinclair’s growth has been primarily fueled by the weekend use, second home crowd vs. full-time residents.  I expect the number of full-time residents to increase over the next 15 years.  This increase in full-time residents should impact the level of residential and commercial development around the lake.  Lake Sinclair is currently underdeveloped, especially commercially, with substantial amounts of undeveloped shoreline. 

Lake Sinclair should be a great location to invest a dollar or two.  Consult your financial adviser prior to investing in real estate to ensure such an investment is a good fit for your retirement goals.  Explore my website to get a better feel for Lake Sinclair and the area.  If the value of land around the lake continues to escalate over time like it has, now is a better time than later to purchase your undeveloped/developed residential lake lot, commercial waterfront property or water front acreage.