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Back in 2012, Warren Buffett told CNBC that if there was a way to buy thousands of single-family homes at once, and to manage them easily, he would “load up.”
He also emphasized he’d take out mortgages at “Very, very low rates.”
For Buffett, those low mortgage rates were what made housing such a great opportunity. He’s a value investor after all, which means he seeks investments with low prices relative to what they’re actually worth.
And at the time, consumer confidence was low, driving housing prices down. Buffett’s advice in those market moments? “Be greedy when others are fearful.”
Indeed, it would have paid off for the typical American homebuyer. The median price of an American home was $180,000 in 2012. Now it’s 134% higher, sitting around $420,400.
The question is, with prices and interest rates now so much higher than they were, would Buffett’s sentiment still hold for real estate as an investment now?
Invest with a mortgage
The average rate for a 30-year mortgage was 3.65% in 2012. These days, a 30-year fixed mortgage rate is 7.13%.
So, Buffett would probably be a little bit less jazzed on home buying in 2024.
That said, markets are cyclical. Usually (or at least in the world of interest rates) what goes up will eventually come down.
No matter what happens to interest rates, you’ll want to ensure you’re shopping around for the best rate possible–because the search really does pay off.
According to research from Freddie Mac, borrowers who applied for mortgages from two lenders saved up to $600 annually. And if they applied for four or more, those cost savings doubled to $1,200 every year.
For an efficient way to shop for rates, Mortgage Research Center (MRC) helps you quickly compare rates and estimate your monthly payments from multiple vetted lenders. All you have to do is enter some basic information about yourself, such as your zip code, your desired property type, price range and annual income.
Based on the information you provide, MRC will show you mortgage offers tailored to your needs. After you match with a desired lender, you can set up a free, no-obligation consultation to see if you’ve found the right fit.
For those refinancing an existing mortgage, MRC can even help you find a better rate than what you currently have.
Become a landlord without the work
Buffett also clarified that in his dream world of buying all of those homes, he’d need to find an easy way to manage them as investments, too.
Several real estate crowdfunding platforms are currently stripping out the management and admin that’s usually required when you invest in real estate.
For example, With Arrived, you can add rental properties to your investment portfolio for as little as $100 without needing to do any of the heavy lifting or legwork associated with being a landlord.
Arrived’s easy-to-use platform offers SEC-qualified investments such as rental homes and vacation rentals.
Its flexible investment amounts and simplified process allows accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work, like paying for maintenance or securing tenants.
Here’s how it works: You can start by browsing a curated selection of homes, vetted for their appreciation and income potential. Once you find a property you like, choose the number of shares you want to buy.
Then there’s commercial real estate. As an investment, it’s even more challenging to access and manage. And while some commercial investment opportunities are expected to witness weaker growth in 2025, they are not all one-and-the-same. Real estate for essential businesses, like grocery stores and health care facilities, is still popular because it has proven resilient to the broader e-commerce transition.
And First National Realty Partners allows accredited individual investors to access these types of necessity-based, institutional-quality commercial real estate investments — without having to do the research or manage tenants.
The FNRP team has relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods, and provides insights into the best properties both on and off-market. And since the investments are necessity-based, they tend to perform well during times of economic volatility and act as a hedge against inflation.
You can engage with experts, explore deals, and easily make an allocation, all in one personalized portal.
Choosing in-demand markets
Generally, Buffett isn’t a huge fan of investing in real estate for returns. He tends to prefer the stock market, because it can be easier to pinpoint companies with strong growth potential. Real estate can be a bit murkier. That said, he has invested in REITs, and sold his stake in STORE Capital’s REIT after it was acquired by Singapore’s sovereign wealth fund.
If you are looking for an easy way to invest in real estate projects in high-demand U.S.regions, you can buy real-estate-backed bonds with Worthy Bonds that earn a fixed rate of 7% APY.
Worthy Bond proceeds are used to provide secured loans to American real estate projects, including affordable housing, which help strengthen local economies. So you can invest for your future and the future of American communities.
You can also set up a recurring investment plan through auto purchase, and Worthy Bonds will do the rest. What’s more, their roundup feature allows you to automatically invest spare change from everyday purchases.
Sign up today and get started with just $10.
If you’re interested in REITs, DLP Capital offers tax-advantaged, private REITs through various investment funds.
DLP Capital aims to deliver annual returns in the range of 9% and 13% — at par with the S&P 500 index’s 10.26% median annual return. The firm’s success speaks for itself. DLP Housing Fund has delivered 19.47% returns annually between 2020 and 2023.
Accredited investors can earn passive income through monthly, quarterly, or annual distributions, all while benefitting from portfolio diversification and a potentially lower tax bill.
DLP also facilitates the investing process, so real estate investing can be as simple as Buffett dreamed of back in 2012.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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