(Laxmi Corp) | Disclaimer.
With the country’s financial and political situations changing daily, all of us are about their future and how an economic turmoil would affect their savings. So, like many of us, if you’re looking for a retirement plan that helps keep your mind at peace and your savings unaffected from economic instability, then a gold IRA is your best bet.
To make sure you find a genuine company to work with, we have carefully selected and compiled a list of the best gold investment companies out there!
Top 4 Best Gold Investment Companies At a Glance
#1 Augusta Precious Metals – Best Gold IRA Company Overall
(Augusta Precious Metals) | Your Premier Gold IRA Company.
Number one on our list is Augusta Precious Metals, as they currently offer one of the leading gold investment services. They are different from other companies because they guide new clients on the benefits and importance of gold investment. It is one of the top-rated companies by reputable platforms.
One of the unique factors about Augusta is its amazing customer service. Augusta introduces all its clients to gold and silver professionals to help them receive the best possible advice for them. They have a very simple and easy setup process for their self-directed IRAs, and that helps you have entire control over your bullions and feel at ease.
Augusta deeply respects all their customers and forms a trusting relationship with them, and they offer customer assistance throughout the time they work with you. After a transaction, they do not leave you on your own but are always there at your service. They stand by three strict commitments: transparency, simplicity and service.
They have thousands of positive reviews on trust pilot, a very well-known reviewing platform. Augusta has also been a part of the trust links “best of” list for several years in a row. The BBB and BCA have also accredited it.
All the gold that you purchase with Augusta IRAs sits safely deposited in the Delaware Depositary, which is only of the best and most highly guarded depositories in the United States. The precious metals are inaccessible to facility workers, so you do not have to worry about their safekeeping.
Pros:
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BCA (Business Consumer Alliance) has given it a triple-A rating
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Accredited by BBB (Better Business Bureau)
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Simple three-step self-directed IRA setup
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Friendly customer service and assistance even after transactions are complete
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No official complaints were signed against them
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Attained thousands of reviews and 5-star ratings on trust pilot
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Offer 24/7 live chat assistance on their website
Cons:
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The minimum investment requirement is $50,000
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There is no option to set up an account online
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A limited selection of gold and other metal bullions
Click here for Free Gold IRA Kit
#2 American Hartford Gold – Runner Up
(AMERICAN HARTFORD GOLD) | One of the Highest-Rated Gold Investment Companies.
Next on our list is American Hartford Gold; it is one of the highest-rated gold investment companies in the market. This Los Angeles-based company is well known for its easy method of purchasing and the immediate and safe delivery that follows.
To guide individuals and beginners more on the benefits of gold investment, they offer a free 25-page information guide that you can easily sign up for on their website. It contains information on all sorts of precious metal investments and the importance of investment diversification. American Hartford mainly focuses on educating individuals about the importance of diversifying their savings as it helps protect them from sudden economic instabilities. They want people to invest a portion of their savings into precious metals as it retains their value and safeguard against inflation.
Their website has a live chat option, where you can receive assistance on any matter at any time throughout the day. If you need financial or gold investment-based advice, they connect you with gold specialists through a contact number displayed on their main website. They are known for their remarkable customer service at all times.
American Hartford offers many different types of precious metals and rollover IRAs. They have separate precious metals IRAs, silver rollover IRAs and gold rollover IRAs. They also offer direct purchase of physical precious metals assets. Based on your requirement, you can easily opt for any of these options.
This company has a very easy setup process, and you are firstly guided by a professional that listens to your needs and requirements from this investment. You then receive advice on what type of investment plan would benefit you most. They have one of the most diverse ranges of precious metals bullions to select from that, after purchase, are immediately delivered to you.
Pros:
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Approved by BBB
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Put you in direct contact with investment specialists through a phone call
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Have a 24/7 live chat option on their webpage for queries and help
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Offer a diverse range of bullions such as coins, bars, etc
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Deliver bullions immediately and safely soon after purchase
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Let you sign up for a free of cost 25-pages information guide on gold investment, bullions and rollover IRAs
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Friendly customer assistance
Cons:
Click here for Free Gold IRA Kit
#3 Birch Gold – Top Choice For Beginners
(Birch Gold Group) | Top Choice For Beginners.
Coming in third on our list is Birch Gold. It is known for its friendly customer service and top ratings by BBB and BCA. They make sure to make the process of setting up IRAs extremely easy for all their customers as they understand that you are trusting them with large sums of money.
As one of the top-rated gold and precious metals companies, Birch offers four types of metals. They want individuals to invest a portion of their savings towards precious metals as this would help their savings hedge against inflation, deflation and other economic instabilities. Birch offers gold, silver, platinum, and palladium. You can invest in either of these or a combination of all these worthy metals.
To make the setup process easier for you, they connect you to a gold and silver specialist who goes over your case and requirements and then further suggests to you what type of investment you should make. These advisors help you make the most out of your investment to ensure you have a safe future.
They have very high ratings on trustpilot, and all their current customers are very pleased with the services they receive. If you select Birch Gold, all your bullions would be safely kept in a depositary, and if you were to purchase physical metals, they would be safely delivered to your doorstep.
Pros:
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Received a triple-A rating by BCA
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BBB has given it an A-plus rating
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Provide you assistance from gold specialists and financial advisors
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Offer various precious metals such as gold, silver, palladium, and platinum
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Easy sign for their free information guide on their website
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Immediate and safe delivery of physical assets
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Thousands of 5-star ratings on trust pilot
Cons:
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Sign-up is only possible through a specific link
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They provide no solid buying back plan
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They do not disclose all the fees and expenses upfront
Click here for Free Gold IRA Kit
#4 Goldco – Great Minimal Prices
(Goldco) | Great Minimal Prices.
Last but not the least, on our list of the best gold investment companies, is Goldco. It is a company based in the United States known best for its easy setup of self-directed IRAs and gold rollover IRAs. If you’re new to gold investment, Goldco is an amazing pick for you because they offer various precious metals, and their setup process is one of the easiest ones out there.
Goldco has friendly customer service, with their assistants helping you every step of the way. They introduce you to the best custodians out there, and they help in understanding your requirements and then offer you plans that will be the best for you.
With Goldco, you can either set up a basic IRA or, if you wish to purchase precious physical metals, they also offer that. They offer one of the widest range of bullions for you to select from, from bars to coins. They offer bullions in metals like gold, silver, platinum, and palladium. Their IRA setup is one of the quickest ones out there and is a simple three-step setup.
If you have any queries at any time, they have 24/7 live chat assistance on their website, so you do not have to wait days in curiosity to get help. To help you understand precious metals investment, they offer a free-of-cost information kit that you can easily sign up for on their website. If you want an easy and friendly company to work with that is low maintenance, then Goldco is the best option.
Pros:
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Both BBB and BCA have given it their highest ratings
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Accredited by CAA (Consumer Affairs Accredited)
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Thousands of 5-star reviews on trusted platforms
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Chat assistance on their webpage is available 24/7
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One of the lowest annual maintenance charges
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Free information kit sign up available on the website
Cons:
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No online setup is available at the moment
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Do not accept payments via debit or credit cards
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Their accounts require a minimum investment of $50,000
Click here for Free Gold IRA Kit
Why You Should Invest In Gold Investment Companies
When you’re investing your savings into something, you’re doing it with the hope of making a profit on it for a secure future. All the other investment options are amazing now, but they might not be beneficial in the long run. With stock, real estate and crypto markets being easily affected by inflation, currency degradation and other factors, your mind would never be at ease, and you could possibly lose all your life savings.
Gold investment is an amazing option because gold never loses its value in the market, and it is the least affected by economic instability. Gold investment companies make investing in gold so much easier for you than if you were to go out of your way and purchase precious metals yourself.
Gold investment companies link you up with financial and gold specialists that go over your needs and then suggest what type of investment plan would be the best for your future. The company’s workers also make setting up your account quite quick and easy for you.
Working with a company gives you a better understanding of the gold market and how buying back works. Since most gold investment companies offer amazing buying back plans, you do not have this to worry about at the back of your mind.
Another benefit of working with a gold investment company is that your gold and other precious metals are always in a safer place. The metals are kept in privately guarded depositories, and you do not have to worry about them all the time.
Benefits Of A Gold Investment
There are endless long-term benefits of getting into the gold investment market right now. Following of some factors that make it so beneficial and profitable:
The Rising Price Of Gold
As we have witnessed in our life and economic history, gold has never really lost its value. The value of gold has only ever increased over time. Inflation, deflation and other economic devaluation affect its value in the market, but that decrease is quite minor, and it also recovers back in a short period.
So if you were to invest in gold right now and pull it out a few years later, you would gain a lot of profit. If you invest in gold intending to keep it for your future, it would have easily doubled its value.
Other alternate investment options like stocks and real estate are limited to a country, whereas gold globally never loses its value. Whenever there is a shift in gold prices, it’s a global shift, so with gold, your money is guaranteed to grow more. With gold investment, your heart is at peace knowing that your money will most likely give you a profitable return.
Long-term Safeguard And Protection
Gold investment is the most sensible decision if you plan to secure your future. Gold is one of the only investment options that stands its ground and hedges against inflation, and in the long run, gold’s value only increases. You can’t really rely on other investment options as they could face drastic damage any day, and you would be at a great loss. On the other hand, even if all your investments went into loss, the metals investment would still hold its value.
In the future, when in a time of need you need to pull out some of your savings, the most reliable option is gold because you know that it has a profitable return. Gold IRAs are quite low maintenance as the company secures your precious metals for you. They also provide a solid buying back plan, which is another responsibility taken off your shoulders. Over time you also earn interest on your gold or silver, so you don’t need to worry about your money losing its value in the future.
Diversification
All financial advisors suggest individuals diversify their savings and invest in not only one but many different investment plans. There are many alternate investment options out there, such as cryptocurrency, stocks, bonds and real estate. Diversification of your savings is extremely important for your future because if you were to face a major loss in one of your investments, the other investments you have would be your safety blanket.
When finance specialists give advice, they strongly suggest you invest a part of your savings into gold because that part will be susceptible to the least damage from economic instability. The probability of gold investment loss is very low compared to the stock market or real estate. Stocks and cryptocurrency face drastic changes daily and do not recover for long periods. Real estate also has its highs and lows, and unless you are very well knowledgeable about the market, you can lose all your money.
The portion of your money you invest into gold would help ease some of your stress. Gold investment companies also make your work easier for you and give you all the basic knowledge you need about investing in precious metals, so you don’t feel like you’re out of the loop.
Tax Benefits
With some gold IRAs, your contributions and the profit you gain are not taxed. Some gold investment companies let you withdraw from your IRAs without any tax deductions as long as you have held the account for a specific amount of time and also if you meet other requirements which are specific to each company.
Working with some companies, you can get tax credits if you make specific amounts of contributions to your IRA. Whenever you sell any of your investment stocks or properties, a certain portion of it goes into paying tax. You don’t feel it as an extra burden with gold because the profit is mostly so high and the tax deduction so low.
Things To Be Aware Of Before Opening A Gold Investment
Before setting up your IRA or getting into gold investment, be on the lookout for the following possible factors that could affect your savings or result in a major loss:
Fees and Expenses
Many companies are not entirely transparent with you when it comes down to opening your account or purchasing precious metals, and some companies can be dishonest and sneak in extra charges.
When you open an account with any company, they have annual maintenance charges, possible tax deductions and depositary charges if you open an IRA. Usually, good companies guide you through their process and ensure you are aware of all extra expenses. All this information is also stated in their paperwork, so make sure to double-check these details before signing.
Even though all companies have different annual charges, if something feels unreasonably expensive, you should not opt for it. If you find any company charging unnecessary fees, you should not work with them and look at other possible options. Instead, there are many transparent and honest companies out there offering the same services. Always keep an eye on the annual deductions from your account to make sure no extra amount is being deducted.
No Yield, No Dividends, No Interest
High yield and more interest are one of the major perks of gold investment. You earn specific amounts of interest on your initial investment, and then you also receive more interest on the increased amount over time. Many companies guide you on these perks and are honest with you. If a company isn’t honest with you or they rob you of these perks, then you should not opt for them because many more companies will offer you a better deal.
The whole point of investment is for it to be at its maximum potential whenever you need it in the future. If there are no dividends or good yield, then any investment is just more beneficial for the company than it is for you.
Fraud and Theft
With anything that involves large amounts of money, there are huge chances of you coming across scams and frauds. Suppose you ever find yourself in a position where a salesperson is being too pushy, or a company’s offers sound fishy. In that case, you should step away from a situation like that to avoid a messy situation. A good company never needs to oversell; they guide you through all they can offer, leaving it up to you to decide what’s best for you.
Always keep your personal information and your IRA credentials to yourself. Even if a company worker asks for them through call or email, make sure it is legit, then only share such information. Such personal information is mostly never needed by the company, so you should only keep it to yourself to avoid any sort of theft or scam.
Always stay updated with the news on different platforms to be aware of possible fraud alerts. When opening an account, conduct prior research on the company to know it is authentic, and you won’t face loss.
Buyers Guide To Investing In A Gold Investment
If you are a beginner in gold investment, the following are some important steps you should familiarize yourself with before you invest your savings:
Speak With A Financial Advisor Or Lawyer
If you decide for yourself that you want to invest in gold or other precious metals, the first thing that you should do is speak with a financial advisor. This step is extremely important for you as a beginner because you need someone to help you understand and learn more about investment.
Only a financial advisor can best understand your needs from the investment and then guide you towards what type of investment plan would be the best for you. Whether you need more long-term perks or safer options, only an expert can guide you on such matters. Based on your current situation, they’ll also guide you on how to diversify your savings and what part of your savings you should be putting towards gold investment.
Work with an honest and reputable advisor that rightfully guides you on the positives and negatives of gold investment.
Review Current News For Fraud Alerts
Always keep yourself updated about fraud and scam alerts, and check news and social media platforms daily for market updates. If you have decided to invest in gold, the last thing you need is to be working with a fraud company or salesperson. For your own safety, you should research any company before committing to it.
Even if you have heard all good things about a specific company, don’t sign official contracts unless you know by your own cross-checking that they are legit. If some company’s offers sound too good to be true, then it is highly likely to be a scam.
You can even learn a lot about possible frauds through your own social circle, be attentive and careful when the matter is about your life savings.
Select A Gold Investment Company And Setup The IRA
Once you are set and aware of what type of investment plan you’re looking for, the next step is for you to find a good reliable gold investment company. When you put huge amounts of money into a company, you need to make sure you trust it completely. One can only do their own research about a company to a limited extent; it then comes down to how the company’s clients feel about working with them.
You might find a company that’s offering what you’re looking for. Still, for safety, you need to read more about the company and its customer’s experience on various reviewing platforms. One of the most trusted platforms is trust pilot, the reviews there are mostly authentic, and if a company has a good rating on trust pilot, then it is surely a good pick.
Another thing that makes a company stand out from the rest is its approval and good ratings by BBB (Better Business Bureau) and BCA (Business Consumer Alliance), two very reputable platforms. If it ticks all the good boxes, then you should definitely choose it as the company where you establish your IRA.
Establish And Fund The IRA
The next step towards completion is actually opening an IRA with the company that offers what you require. Usually, all top companies have a simple three-step process for opening your self-directed IRA, and they assist you along the way. Make sure the company you select has an efficient and quick transaction process, so your account opens up without small barriers in every step.
Once you have opened the type of precious metals IRA that fits your needs, you need to fund this account then. Most companies accept all forms of payments, but some do not take credit/debit cards, so if that is something you’re not comfortable with, you can work with a different company instead.
Once the account has been funded, you can then select from the variety of metals that the company offers.
Invest In Precious Metals Via The IRA
After establishing your precious metals IRA, you can select which metals you want to invest in from the variety of metals your account company offers. Investing in precious metals via an IRA is a really good decision as the value of metals increases in the long term, and you would secure a safer future. Precious metals IRAs are also quite low maintenance. After you have completed your purchase, the company deposits your bullions in a protected depository where they are safe and secure. So the safety of your gold is something you have to worry less about.
Most companies offer gold, silver, platinum and palladium IRAs. You can select any of these or a combination of these precious metals for your IRA. The type and amount of metals you select depend on your requirements, which is why good companies offer you direct contact with gold specialists to help guide you in the right direction.
Gold Investment Rollovers
Rollover IRA is a process by which you can switch a part of your current retirement plan to a self-directed IRA. A gold IRA is far more beneficial than a basic IRA because gold hedges against inflation and economic uncertainty. Gold’s value will also likely increase in the future, so it secures a part of your savings.
The process is quite easy, and most companies nowadays offer easy rollovers, so you don’t have to worry about going the extra mile to change to a self-directed IRA.
401k gold Investment Rollovers
With all companies offering rollover gold IRAs, you can easily switch from your 401k to a gold IRA, which means taking a part of your current 401k and putting it into a precious metals IRA and then buying precious metals via the IRA. Switching helps you as precious metals retain their value and are barely affected by the economic crisis in the country. Dollars are more susceptible to damage from inflation and deflation, and this damage can also be very severe.
So the smarter decision is to switch your 401k to a gold IRA. You can make this process easier for yourself by selecting a company that deals in rollover IRAs, as this is their specialty, and they will suggest a unique plan to your requirements.
5 Things To Look For When Choosing A Gold Investment Company
When you are selecting which gold investment company you are going to work with, you should look at some of the following basic factors before you make a decision:
Ratings
How a company’s actual clients and other reputable platforms think about it really matters a lot. When you are investing such a huge amount into a company, you want to make sure it is reputable and legit. You can learn a lot about a company and what it has to offer from its official website, but you must also do your own research and see how well the company stands in the market.
One of the biggest accurate sources of information on any company is BBB and BCA, their ratings are very accurate, and all the companies that are approved by these two platforms live up to the expectation.
Trust pilot is a reviewing platform with countless reviews on almost every company you could think of. Reviews on this platform are always accurate and not fabricated. Any company with 4-star to 5-star ratings on trust pilot is likely to be a good option.
All the companies mentioned in this guide have amazing ratings and reviews, so that is something you do not have to worry about with these companies. Sometimes it is also possible for a company with an average rating to offer you exactly what you need, but in that case, you would be taking a leap of faith. So be careful!
IRA Fee Structure
All companies charge annual or monthly maintenance charges. These charges are different for every company based on the company you select and the type of account you open. Usually, they range from around $25 to $60. However, some companies out there have extremely high maintenance, and they charge hundreds of dollars in annual fees. Please select your company keeping in mind all the extra charges that they have.
These charges are deducted directly from your account at the end of each year, or you could pay this amount separately to your IRA company. When this fee is deducted from your account, there are no extra tax consequences on it. All companies offer either one or both of these methods, so when you select your IRA company, ensure that they offer the payment method that you prefer.
All official paperwork contains these compulsory charges and other financial details that are quite important. Before you sign any paperwork, make sure you go over it with your financial advisor or lawyer so that you don’t miss any important details.
Efficiency And Delivery Time
With something as worthy as gold and precious metals, your heart would never be at peace unless the gold is either in your possession or safely resting in a guarded depositary. When you’re working with a reputable gold investment company, it shall be your basic criteria to expect fast and efficient service. It would be hard to form a good relationship with any company if they test your patience and have poor customer service.
Good companies offer immediate delivery very soon after your transaction has been processed in their system because they understand how important something you have put your money into is for you. When checking reviews for any company, make sure to immediately cut off the ones with slow service from your list because that is the last thing you need when your money is at stake.
If at any point you have a query or need assistance, you need someone to get back to you soon and be helpful to you. For that, you should look for companies that offer live chat or 24/7 helplines; if you’re an anxious person, this would be very helpful for you.
Pushy Salesperson and Unsupportive Customer Service
If you ever encounter a pushy sales associate, that is a sign of rethinking your decision. A good company would never force or push you into working with them; they let their services do the talking. Whether you select the company or not is entirely your decision, and one should not be implying it to you. If you ever feel that way, you won’t have a comfortable relationship with that company moving forward.
A salesperson overselling their product or tricking you into agreeing with them makes the company look quite suspicious. So don’t fall into their trap as it could possibly even be a scam or fraud company.
Another thing to ensure before settling with any company is how good their customer support is. Good customer support would mean individuals that care more about your comfort than what is more financially beneficial for them. The companies mentioned in this guide also offer customer service throughout the time they work with you to make you feel at ease; this is something you should look for in the company you select.
Other Alternative Investment Options Available
Even though investing in gold is one of the most sensible investments, you should be well aware of all the other available investment options. Alternative options are cryptocurrency, bonds, stocks, real estate, etc.
For any sort of investment that you make, you need to make sure you have sufficient knowledge of that specific market. If you step into any of these investments without knowledge, it can result in a major loss. It is always a hit or miss with stocks and crypto, even for knowledgeable individuals.
However, all financial advisors suggest diversifying your savings, so it is best to explore all your options before making a decision. Seek financial advice from your advisor and lawyers at each step of the way as they know your requirements the best.
Final Thought – Best Gold Investment Companies
Based on your individual’s future plans, your investment requirements will differ from the next person, and therefore, the company you select at the end of the day needs to be the one that fits your needs the best. Our guide tells you about 4 of the best gold investment companies that you could rely on.
However, we have to say if you consider it from every possible aspect, the best gold investment company overall is Augusta Precious Metals. Not only is this company approved by BBB and BCA, but it also has 5-star ratings across all credible reviewing platforms such as trust pilot.
The best thing about Augusta is that they provide endless customer support the entire time they work with you, unlike other companies that prioritize new potential clients. Plus, they keep all their gold and metal bullions in one of the safest privately guarded depositories out there, so your mind will always be at ease.
At the end of the day, the decision is in your hands; we understand this is a very important life decision for you, so go with the safest, most comfortable option you find. Be careful and select sensibly!
Investors withdrew billions of dollars out of U.S. investment-grade corporate bonds and related exchange-traded funds over the past week as the Federal Reserve’s aggressive rate hikes plans feed fears of an economic downturn.
U.S. high-grade funds and ETFs saw the biggest weekly outflows of $8.9 billion in the week ended on June 22 from a $6.56 billion outflow a week earlier (see chart), according to a BofA Global, in a weekly report.
SOURCE: BOFA GLOBAL RESEARCH, FINRA, TRACE, FEDERAL RESERVE
Read More: Corporate America’s debt sinks to lowest prices since 2008. What comes next hinges on inflation
“This weekly outflows was the biggest this year, exceeding the previous record $8.07 billion outflow during the week of May 11,” a team at BofA Global Research wrote on Thursday. “The outflows were largely driven by ex. short-term HG (to $7.12bn from $5.49bn), while outflows from short-term HG remained more moderate (to $1.79bn from $1.06bn).”
Investors in U.S. corporate debt market have hit by the sector’s sharply negative performance this year, including after high inflation data prompted the Federal Reserve’s decision to raise its policy rate by 75 basis points, the largest move since 1994.
The biggest ETFs for U.S. corporate bonds were headed for weekly gains, but sharp yearly losses. The iShares iBoxx $ Investment Grade Corporate Bond ETF
LQD,
was up 0.1% Friday, but down about 17% on the year so far, according to FactSet data.
A Federal Reserve and Securities Industry and Financial Markets Association (SIFMA) data shows that the U.S. companies now face $10 trillion outstanding debts as of the first quarter of 2022.
The 10-year Treasury yield
TMUBMUSD10Y,
climbed to 3.12% on Friday, yet it remains sharply lower after hitting a 11-year high earlier this month. Treasury yields move opposite to price.
Read more: What the Fed’s biggest rate hike in decades means for the bear market in bonds
Some buyers tend to choose better properties because of their emotional connect with them and the liveability factor. They are just as important as investors
Some buyers tend to choose better properties because of their emotional connect with them and the liveability factor. They are just as important as investors
It is often thought that people who buy homes for their personal use are not too interested in the property’s potential to appreciate in value. These buyers, usually referred to as ‘end-users’, simply want a safe and comfortable place to live; only investors are interested in price appreciation.
This is unacceptable. If people merely wanted homes to live in, renting homes would be enough for them. They would not put all or most of their savings into making a hefty down-payment on a house, and then commit to paying EMIs for anything between 10-20 years.
Who is more serious about property purchases? When Indians buy homes, they make investments like investors do — even if they do not intend to make money out of the property. An owned home is not just a ‘status symbol’ — it is also a precious asset that can be borrowed against or even sold for a profit in the future. It is the ultimate investment even for so-called ‘end-users’ because it does not sit in a demat account or bank locker, but is actively used even as it becomes more valuable. This is why, just like gold, real estate is bought at auspicious times during the year. Of course, ensuring the family’s wellbeing is a significant consideration when purchasing a home on auspicious days. This is why so many Indians try to buy high-value assets, including real estate, during these festive times.
In this respect, both ‘end-users’ and investors have the same objectives. ‘End-users’ also desire the value of a property to go up once they have purchased it. But there are also critical differences between the end-user and investor approach to property purchase. Like in the case of gold, investors want to buy good properties at the lowest possible price so that the price appreciation is better and faster. They purchase properties from a pure profit motive, which surely does have advantages in the case of gold and stocks.
Where dreams come true
Many investors own multiple properties and keep them until their prices have appreciated enough. But end-users tend to choose better properties precisely because of their emotional connection with them. For them, a home is not just a tradeable commodity to rent out and then sell. It becomes an extension of the family, reflecting its values, desires and life concerns.
Investors often do not study the immediate neighbourhood to determine if it is suitable for children to grow up and elders to spend their golden years in peace and comfort. They will mainly study price trends and look at the neighbourhood as a future ‘target clientele’. What is the average purchasing power of the area today, and what is it likely to be five years from now? They will think of the current and upcoming infrastructure primarily as an ‘ultimate selling proposition’.
End-users will consider the neighbourhood and infrastructure from a much more serious and personal perspective. Is it immediately usable and advantageous? How much can a public transport node help save money on daily commuting? How is the air quality now, and can it deteriorate in the future? Will their children and elders be able to make good friends here and participate in exciting activities?
Investors are usually more interested in the area’s development potential. How soon will it reach saturation so that prices will begin to rise? End-users look at the same pace of development and wonder if there are enough green spaces to support the family’s health in the future as well. And, whether there is a possibility for the open spaces to be built up later.
Wanting this assurance, they will often buy a home in an integrated township where the entire development plan is legally committed and designated open spaces cannot be consumed by more development. They buy township properties because, as a family, they want the assurance of round-the-clock water and electricity supply and a school and hospital nearby. They picked highly liveable properties which have vastly superior resale values.
Liveability vs. profitability
Investors will often not see properties through the lens of such liveability but instead focus on potential profitability based on organic price growth in the area. Investors often sell homes they may have visited only a couple of times since they bought them. When end-users finally sell their homes, they put properties on the market that have passed the liveability test.
The fact that they have lived there for a long time is proof for the buyer that the property and location tick all the right boxes. Unlike investors, they will not sell their homes at break-even or even loss-making prices if the business requires cash flows.
Far too often, the difference between ‘end-users’ and investors is seen as the difference between amateurs and professionals. Nothing could be further from the truth. Families buy their homes with far more care and planning than investors do. They are the most serious buyers who examine every detail of a home before they make their final choice.
The writer is Chairman, Pharande Spaces.
As inflation grinds higher, the search for investments that can keep up takes on greater urgency. We’ve covered some of the individual stocks that look equal to the task in other columns, but which investment trusts will preserve the real value of your money?
Savers have a number of options. Some trusts explicitly have this aim and we have tipped a few in recent columns; they include Ruffer Investment Company, Capital Gearing, BH Macro, RIT Capital Partners and Personal Assets. What these trusts have in common is the aim to preserve capital. What about investors who need income? Where can they get dividends that keep pace with inflation?
There are certain “equity income” trusts that can boast 50-year records of consecutive dividend increases. Impressive though this is, Questor wonders whether these trusts will be able to raise their divis in line with inflation when it is in double digits. They would need their holdings to increase their own dividends by that degree, which looks optimistic.
We need then to turn to other assets and the obvious choice is property. Real estate has several advantages. First, tenants have a legal obligation to pay rents, whereas dividends are discretionary. This makes rental income more resilient in troubled times, which will prove valuable if, as many fear, we have to contend not only with sky-high inflation but with a recession at the same time.
Second, many property leases stipulate that rents can only go up, not down, and often they must rise in line with inflation. However, we must be careful about our choice of property investment trusts. For a start, it’s no good having contracts that specify upwards-only, inflation-linked rent reviews if a recession or “stagflation” forces tenants into bankruptcy. So we need defensive parts of the market.
Next, inflation-linked rental contracts need careful scrutiny, as many cap the increases; 4pc is a common limit. These contracts were drafted in an era when inflation of even 5pc would have seemed a distant prospect, never mind the 9.1pc figure for May announced yesterday. Happily Questor has found a couple of property trusts whose contracts with tenants include no cap on the inflation link.
Triple Point Social Housing Reit is one. Its properties are leased to housing associations that house vulnerable adults and rents are backed by the state, so the income is secure.
While there are no caps on rent rises in its contracts, we must acknowledge, as its managers did last year, that in practice housing associations might struggle to pay the full increase at very high levels of inflation. That said, the recent 5pc rise in Triple Point’s dividend suggests that the associations are not struggling so far at least.
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John Stuart Mill, a 19th-century British economist, shared in his 1848 book “Principles of Political Economy” this general thought: “Landlords grow rich in their sleep.”
He was right. In the nearly 175 years since, tremendous wealth derived from investing in real estate has been passed from generation to generation. But you don’t have to be a millionaire to start your own run as an investor.
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A modest purchase can turn into a profit — money you can re-invest into another property. Or hold onto the property and let the rental income pay your mortgage payment, with money left over at the end of the month. And sit back and watch your investment grow in value.
Pennsylvania Gem
Ryan David, a Pennsylvania property investor, said he was contacted through his website as soon as it launched about a potential purchase.
“We received a lead for a piece of property tied up in an estate over a family member who lived four states away,” David said. “We closed for approximately $15K, which is the price they asked for, and then immediately resold the property to another investor for $55K. There was no work or rehab work done, just a quick as-is resale. To this day, that was the largest spread I’ve ever made on one simple transaction.”
Memphis Moneymaker
Danielle Wolter of San Diego, who runs the blog The Million Dollar Mama, said she has invested in a variety of properties through the years, but the one that sticks out to her was a house in Memphis, Tenn.
“It was a single-family home that needed to be rehabbed. I purchased it for $76K and paid a contractor $20K, in increments, to do the remodel,” Wolter said. “I had to fire that contractor and hire another one to come in and fix the mistakes of the first for another $20K.
“I was all in at $116K. When I went to refinance, the property appraised at $156K, giving me instant equity of $40K. The mortgage (including taxes and interest) was about $600 a month and the rent received is $1,200 a month.”
She said she is in the process of selling the Tennessee property, now valued at $210,000.
In and Out in Indianapolis
Alain Perez-Majul is a full-time real estate investor through his company, Virtue Cash Buyers in Indianapolis, and he shared this story of a short-term purchase that turned into a winner. It was a “very old” multi-family property and was so worn it needed to be torn down, he said.
“The owner lived in Chicago and wanted nothing to do with the property as it was a headache for him, and I was able to help him by taking it off his hands,” he said. “I held the property for a couple of months and sold it to another investor at a profit of $80K. Within the month, the property had been demolished and, to this day — I purchased it around four years ago — it is still just an empty lot. I believe the investor is waiting for the area to turn a bit more before building on it.”
A Dirty Delight
Benjamin Dixon, a licensed associate real estate broker with The Mackay Dixon Team at Douglas Elliman in New York City, was working with a client to find an investment property. He employed this strategy: Look for “the dirtiest house possible in the best location.”
“Many buyers do not have the imagination to look past filthy windows and walls that need to be painted or floors that need to be refinished,” Dixon said. “I recently found an amazing property in Bridgehampton for a client. We purchased the very tired 1970s home for $2.8 million and did a $1 million renovation to refresh the home. It is now in contract for sale at $6 million, and I have a very happy seller.”
A Handshake Deal
For Tomas Satas, one of his best deals fell into his lap when a cousin called and said his neighbor wanted to sell his property. Satas, the founder and CEO at Windy City HomeBuyer, met with the seller, a gentleman who wanted an easy transaction without real estate agents, buyers and inspectors walking through his longtime home.
“I examined the house, and it had some major issues. Wouldn’t have passed inspection,” Satas said. “I talked to him about this and asked how much he wanted for it. Nearly fell over when he told me. (I) asked how he arrived at that number, and it was double what he had paid.
“The man was still operating on 1980s prices. I explained to him that he could make more money if he got it appraised; but, if he wanted, I’d write him a check on the spot. He kept his simple life simple, took the check, I fixed the foundation and some other problems, and percentage-wise, had the (biggest) margin of any flip I’ve ever done.
“The best property I ever bought was on a handshake deal. I learned that he was an avid woodworker, so I mailed him a very large amount on a home improvement store card to thank him.”
Patience Pays Off
For Alyssa Carpenter, it took patience to find a seller willing to accept FHA financing in Austin, Texas, as she looked for her first home: a duplex that doubled as an investment property.
“I was able to secure this property with 3.5% down at a 2.5% interest rate,” said Carpenter, who runs the financial-based website FI/RE Manual. “After a short renovation, I was able to raise rent from $700 for a two-bedroom, one-bathroom to $1,400 for the same unit. The tenant just renewed the lease for a second year. I just moved out of the other side (three-bedroom, two-bathroom) and have leased it for $1,900.”
She continued: “Being able to purchase a duplex as an investment property with so little down has been incredibly impactful. Rents gross $700 a month over the mortgage. This property has also appreciated from the $390,000 purchase price. I received a soft offer from another investor at a purchase price of $515,000. I’m not selling yet, but it’s amazing to see that appreciation in just a few years.”
Their Advice
Real estate investors shared their advice for those interested in investing in residential properties themselves. It begins with networking and marketing yourself as an investor so potential sellers know they can turn to you.
“Let anyone know … you’re a real estate investor and looking to purchase property,” said Antonio Cousin, the broker/owner of Service 1st Real Estate in Louisiana. “You never know who you may come across that may need to sell and can help you out. It’s also a good idea to join your local real estate investors association and network within the group. Networking within could lead to additional opportunities or even a partnership.”
To one seasoned investor, there’s no substitute for knocking on doors.
“In the industry, this is called driving for dollars, where you drive through a desired location and knock on … doors with an offer,” said Craig Stevens, the founder of Groundbreaking Real Estate in the metro New York area. “This technique allows an investor to avoid any bidding wars and can help develop a rapport with an owner since the negotiation occurs face to face. Since the property is not actually on the market, some owners may be surprised at how much their current property is worth and be enticed at the potential to sell so quickly.”
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My summer portfolio strategy is to play the old disco hit “Baby Come Back” while slow dancing with my December brokerage statements. If it works, I have a business idea involving Hall, Oates, and a two-and-20 fee structure.
At least there’s real estate. Home equity is said to be hitting record highs. Then again, taking comfort there would be like slipping on a financial toupee—everyone knows that underlying conditions have deteriorated.
The latest reading on nationwide pricing comes from back in March. Since then, 30-year mortgage rates have shot up to nearly 6%, and applications from buyers have slowed. This past week, a pair of online brokers with a good read on house searches,
Redfin
(ticker: RDFN) and
Compass
(COMP), announced layoffs.
Meanwhile, Redfin shares are down some 90% from their peak. Builders have gotten clobbered, too. Friends don’t let friends own leveraged exchange-traded funds with names like
Direxion Daily Homebuilders & Supplies Bull 3X Shares
(NAIL), especially when interest rates are rising, but if you’re curious, that one just lost 45% over five trading days.
Should investors buy shares of home builders here? Brokers? What’s next for house prices? And when will the stock market come back? Let me answer those in order of declining near-term confidence, starting at iffy.
Yes, buy builders. Prefer
Lennar
(LEN) and
Toll Brothers
(TOL), says Jade Rahmani, who covers the group for KBW. He points out that builder shares trade at 60% of projected book value, which is where they tend to bottom during recessions, ignoring the 2008 financial crisis. Lennar will benefit from the pending sale of a real estate technology unit, and Toll focuses on affluent buyers, around 30% of whom pay cash, and so aren’t put off by high mortgage rates.
Price/earnings ratios across the group are astonishingly low, but ignore them. They stem from two conditions that won’t repeat soon: land values jumping 30% or more from the time companies bought acres to when they sold houses, and a sharply higher pace of transactions during the pandemic. A builder that trades at four times earnings might really go for eight times assuming normalized conditions—still cheap, but a big difference.
House prices jumped more than 20% in March from a year earlier, but Rahmani expects that rate to plunge to 2% by the end of the year. His baseline view is that next year brings flat prices. His recession scenario, based on a study of past sales volumes, has prices falling 5% next year—perhaps more if mortgage rates rise to 7%. That might not sound like much, but for recent buyers with typical mortgages, a 5% price drop can reduce equity by 25%.
Most homeowners don’t have mortgage rates anywhere near recent ones; some two-thirds are locked in below 4%. These buyers are unlikely to move and take new loans if they don’t have to, which is one reason that supply could stay low for years. Another is that mortgages are much higher quality than they were during the last housing bubble, so there’s unlikely to be a wave of defaults and panic selling.
But something has to give on affordability. Typical payments on new mortgages have topped 23% of disposable income, close to their 26% high during the last bubble. But incomes are growing by 6% a year, so a long pause for house prices could help restore affordability. Anyhow, the pandemic has left people spending more time in their homes, so they should be willing to pay somewhat more on housing as a percentage of their income, reckons Rahmani.
Don’t rush to buy shares of the brokers, says William Blair analyst Stephen Sheldon. He has Market Perform ratings on three of them: Redfin,
RE/MAX Holdings
(RMAX), and
eXp World Holdings
(EXPI). In a blog post this past week, Redfin CEO Glenn Kelman wrote that May demand was 17% below expectations, and that the company will lay off 8% of employees. Redfin hires agents directly, whereas many brokers use independent contractors.
Kelman wrote that the sales slump could last years rather than months. More agents could leave on their own. National Association of Realtors membership, a proxy for the number of people selling houses, hit 1.6 million last year, up from about a million in 2012.
Sheldon at William Blair says he’s struck by how far broker valuations have come down, but sentiment is sour, and he’s waiting for signs of stabilization. Redfin goes for less than a tenth of its peak stock market value early last year, even though revenue has roughly doubled. That puts shares at around one-third of revenue. Free cash flow was expected to turn consistently positive starting in 2024. Now, we’ll see.
As for the stock market, I have good news and bad news, neither of which is reliable. The S&P 500 this past week dipped below 15 times projected earnings for next year, which suggests pricing has returned to historical averages. But there’s nothing to say that the market won’t overshoot its average valuation on its way to becoming cheap. And
Goldman Sachs
says forecasts for 10% earnings growth this year and next look too high.
Expect slower growth, says Goldman, and if there’s a recession, earnings could fall next year to below last year’s level. The bank’s estimates under that scenario leave the S&P 500 today trading at more than 18 times next year’s earnings. Goldman predicts that the index will rise 17% from Thursday’s level by year’s end without a recession, or fall 14% with one. Please accept my congratulations or condolences.
Not to worry, says Credit Suisse. Statistically, individual forecasts for company earnings are tightly clustered. That’s the opposite of what tends to happen before earnings tank.
I’ve heard people refer to the stock market as a “total cluster” before, but I had no idea they were talking about estimate dispersion.
Write to Jack Hough at jack.hough@barrons.com. Follow him on Twitter and subscribe to his Barron’s Streetwise podcast.
My summer portfolio strategy is to play the old disco hit “Baby Come Back” while slow dancing with my December brokerage statements. If it works, I have a business idea involving Hall, Oates, and a two-and-20 fee structure.
At least there’s real estate. Home equity is said to be hitting record highs. Then again, taking comfort there would be like slipping on a financial toupee—everyone knows that underlying conditions have deteriorated.
The latest reading on nationwide pricing comes from back in March. Since then, 30-year mortgage rates have shot up to nearly 6%, and applications from buyers have slowed. This past week, a pair of online brokers with a good read on house searches,
Redfin
(ticker: RDFN) and
Compass
(COMP), announced layoffs.
Meanwhile, Redfin shares are down some 90% from their peak. Builders have gotten clobbered, too. Friends don’t let friends own leveraged exchange-traded funds with names like
Direxion Daily Homebuilders & Supplies Bull 3X Shares
(NAIL), especially when interest rates are rising, but if you’re curious, that one just lost 45% over five trading days.
Should investors buy shares of home builders here? Brokers? What’s next for house prices? And when will the stock market come back? Let me answer those in order of declining near-term confidence, starting at iffy.
Yes, buy builders. Prefer
Lennar
(LEN) and
Toll Brothers
(TOL), says Jade Rahmani, who covers the group for KBW. He points out that builder shares trade at 60% of projected book value, which is where they tend to bottom during recessions, ignoring the 2008 financial crisis. Lennar will benefit from the pending sale of a real estate technology unit, and Toll focuses on affluent buyers, around 30% of whom pay cash, and so aren’t put off by high mortgage rates.
Price/earnings ratios across the group are astonishingly low, but ignore them. They stem from two conditions that won’t repeat soon: land values jumping 30% or more from the time companies bought acres to when they sold houses, and a sharply higher pace of transactions during the pandemic. A builder that trades at four times earnings might really go for eight times assuming normalized conditions—still cheap, but a big difference.
House prices jumped more than 20% in March from a year earlier, but Rahmani expects that rate to plunge to 2% by the end of the year. His baseline view is that next year brings flat prices. His recession scenario, based on a study of past sales volumes, has prices falling 5% next year—perhaps more if mortgage rates rise to 7%. That might not sound like much, but for recent buyers with typical mortgages, a 5% price drop can reduce equity by 25%.
Most homeowners don’t have mortgage rates anywhere near recent ones; some two-thirds are locked in below 4%. These buyers are unlikely to move and take new loans if they don’t have to, which is one reason that supply could stay low for years. Another is that mortgages are much higher quality than they were during the last housing bubble, so there’s unlikely to be a wave of defaults and panic selling.
But something has to give on affordability. Typical payments on new mortgages have topped 23% of disposable income, close to their 26% high during the last bubble. But incomes are growing by 6% a year, so a long pause for house prices could help restore affordability. Anyhow, the pandemic has left people spending more time in their homes, so they should be willing to pay somewhat more on housing as a percentage of their income, reckons Rahmani.
Don’t rush to buy shares of the brokers, says William Blair analyst Stephen Sheldon. He has Market Perform ratings on three of them: Redfin,
RE/MAX Holdings
(RMAX), and
eXp World Holdings
(EXPI). In a blog post this past week, Redfin CEO Glenn Kelman wrote that May demand was 17% below expectations, and that the company will lay off 8% of employees. Redfin hires agents directly, whereas many brokers use independent contractors.
Kelman wrote that the sales slump could last years rather than months. More agents could leave on their own. National Association of Realtors membership, a proxy for the number of people selling houses, hit 1.6 million last year, up from about a million in 2012.
Sheldon at William Blair says he’s struck by how far broker valuations have come down, but sentiment is sour, and he’s waiting for signs of stabilization. Redfin goes for less than a tenth of its peak stock market value early last year, even though revenue has roughly doubled. That puts shares at around one-third of revenue. Free cash flow was expected to turn consistently positive starting in 2024. Now, we’ll see.
As for the stock market, I have good news and bad news, neither of which is reliable. The S&P 500 this past week dipped below 15 times projected earnings for next year, which suggests pricing has returned to historical averages. But there’s nothing to say that the market won’t overshoot its average valuation on its way to becoming cheap. And
Goldman Sachs
says forecasts for 10% earnings growth this year and next look too high.
Expect slower growth, says Goldman, and if there’s a recession, earnings could fall next year to below last year’s level. The bank’s estimates under that scenario leave the S&P 500 today trading at more than 18 times next year’s earnings. Goldman predicts that the index will rise 17% from Thursday’s level by year’s end without a recession, or fall 14% with one. Please accept my congratulations or condolences.
Not to worry, says Credit Suisse. Statistically, individual forecasts for company earnings are tightly clustered. That’s the opposite of what tends to happen before earnings tank.
I’ve heard people refer to the stock market as a “total cluster” before, but I had no idea they were talking about estimate dispersion.
Write to Jack Hough at jack.hough@barrons.com. Follow him on Twitter and subscribe to his Barron’s Streetwise podcast.
Four Corners Property Trust (FCPT – Free Report) recently announced signing a definitive agreement for the purchase of 11 outparcel properties from Pennsylvania Real Estate Investment Trust (PEI – Free Report) , commonly known as “PREIT”, for $32.5 million. The move comes as part of its portfolio-expansion efforts.
However, reflecting broader market concerns, shares of Four Corners marginally declined to $26.66 during Friday’s regular session.
Located within highly trafficked and populated corridors in Maryland, Massachusetts, Pennsylvania and South Carolina, the retail outparcels are likely to keep witnessing solid demand.
The portfolio comprises eight single-tenant restaurant properties and three non-restaurant retail properties and each property has a separate, individual lease. The leases have a current weighted average residual term of roughly eight years. The transaction is priced at a 6.5% going-in cash cap rate, exclusive of transaction costs.
A large chunk of the portfolio is expected to be acquired in the second and third quarters of 2022. However, this is subject to customary closing norms, seller’s board approval and regulatory nods.
According to Bill Lenehan, CEO of FCPT, the company continues its “strategy of identifying low-rent outparcel properties leased to strong credit operators.”
Primarily engaged in the ownership and acquisition of high-quality, net-leased restaurants and retail properties, Four Corners seeks potential acquisition opportunities to enhance its portfolio with real estate catering to the restaurant and retail industries.
In sync with such efforts, the company is also shedding assets and redeploying proceeds for its growth endeavors. Recently, the company announced the disposition of an Olive Garden restaurant property, which is located in Florida and operated by Darden Restaurants, for $6.3 million. In an effort to repurpose proceeds into new investment opportunities, Four Corners plans proceeds redeployment from this move through an Internal Revenue Code Section 1031 like-kind exchange.
Four Corners currently carries a Zacks Rank #4 (Sell). Shares of FCPT have rallied 0.3% over the past three months against the industry’s decline of 8.8%.
Image Source: Zacks Investment Research
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Some key picks from the REIT sector include Terreno Realty (TRNO – Free Report) and OUTFRONT Media (OUT – Free Report) .
The Zacks Consensus Estimate for Terreno Realty’s 2022 funds from operations (FFO) per share has marginally moved upward in the past two months to $1.96. TRNO presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for OUTFRONT Media’s ongoing year’s FFO per share has been raised 51.4% over the past two months to $2.09. OUT sports a Zacks Rank #1 currently.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Opinions expressed by Entrepreneur contributors are their own.
Have you ever wondered what’s behind the success of ultra-successful athletes or businesses? I’m always correlating sports with business because there are many similarities between the two. In both aspects you have a team pushing to achieve the same goal. You have a captain that leads the team in the right direction. And there are many people involved with all the different kinds of skills, personalities and experience that each player has.
There is something special about how athletes are able to compete at a high level. And this correlates significantly with business. Tiger Woods has a golf coach, personal trainer, sports agent and other staff to help him achieve maximum results and win PGA championships. In hockey you have star players that score goals, goalies that defend the net from the opposition, defensemen who focus on blocking shots and tough guys that get into fights and deliver big hits. The best team wins the Stanley Cup.
Business is the same way. You have many different players that accomplish many different goals. You have sales people that grow the company’s revenue. Then there’s accounting to determine what the numbers are, social media promoters, advertising specialists and graphic designers. And in real estate, you may also have maintenance staff. There are many important roles that help make the company achieve its goals. You can’t be the best if you’re missing any of these skills.
Related: 6 Advantages of Real Estate Investing for Savvy Entrepreneurs
Four players you must have to be successful in real estate
The deal hunter
This is one of the most important roles on your team. Somebody who can find deals is where all the value is. Without deals you can’t build a team, you have no revenue and there’s really no business. This person must be good at relationship building. Including but not limited to making cold calls, cultivating deals and finding a way to expand the business. They’ll be able to multiply your assets under management.
This person also must know all the investment criteria that you need. So that you acquire the deals that are going to help you grow. Not every multifamily real estate deal makes sense or fits the business model. This person may look for deals that are listed on the market, which are typically more competitive with more bidders. This person also builds strong relationships for the long term. You may communicate with somebody that has real estate in their portfolio that may sell immediately or in the future. You have to always stay in front of these prospects and communicate regularly to make the deal come to fruition.
The master underwriter
You need to have somebody that knows how to analyze investment deals. When you look at multifamily properties, you have to know how many units of each floor plan there are, how many square feet, what’s the rent per square foot and how much the monthly rent is. You also have to figure out what other incomes are being collected at the property. There may be laundry income, pet rent, pet fees, late fees, termination fees, forfeited deposits, extermination fees, parking fees and much more.
On top of figuring out the income, you must factor in all the expenses. You have to determine how much the investment costs to operate. There’s a substantial amount of analysis that goes into underwriting real estate. You also need to have somebody who knows how to set up the financing with the bank. And, determine how much equity you need to invest in the property.
Related: Creative Financing Strategies for Real-Estate Investments
The property manager
A property manager is an important role that will generate revenue for your property. This person will list all of the apartment units and make sure everybody moving in has a high enough credit score to afford the monthly rent. Additionally, this manager will also be in charge of the maintenance staff and ensure that the property is kept up and immaculately maintained. You need somebody in this position that is going to work hard and pay attention to details. Tech skills are a must so rental property software is kept up to date — in order to tell you whose rent has been collected and who needs to be issued a late payment.
The maintenance tech
When you have hundreds of tenants, there’s always going to be something that has to be repaired. It’s inevitable for something to go wrong on a property. When you’re dealing with people, there are always issues such as leaky faucets, plumbing backups or ceiling, window and electrical repairs to resolve. This person will be in charge of going from job order to job order to make sure tenants are satisfied and the properties are well-maintained. This person may also be in charge of grounds clean-ups and making sure the highest quality service is provided to residents.
How do you get started with all of this?
In the beginning you may be doing some of these tasks all by yourself. Once you get started and have enough assets under management, you will be able to spend money that the company generates. You can then hire employees to fill in the gaps for each of these positions. But the first thing you should do to get started, if you’re just beginning, is to find your first real estate deal. You have to find that first deal to take a step forward in the right direction to acquire assets and start building a portfolio. Once you get one deal, then you can start looking for the next one and start refining your system.
Related: 6 Questions to Ask Yourself Before Investing in Real Estate for Your …
Commercial Metals Company (CMC – Free Report) is scheduled to report third-quarter fiscal 2022 results on Jun 16, before the opening bell.
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for the fiscal third-quarter revenues is pinned at $2.36 billion, suggesting growth of 28.1% from the prior-year quarter’s levels. The Zacks Consensus Estimate for earnings per share is pegged at $2.00 for the quarter, indicating a year-over-year increase of 92.3%.
Q2 Performance
In the last reported quarter, the company’s earnings and sales beat the Zacks Consensus Estimates and increased year over year. Commercial Metals has a trailing four-quarter earnings surprise of 15.9%, on average.
What Does Our Model Indicate?
Our proven model conclusively predicts an earnings beat for Commercial Metals this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Commercial Metals is +10.00%.
Zacks Rank: Commercial Metals currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Factors
Commercial Metals is likely to have benefited from robust demand for finished steel products across most of its product lines in the spring and summer construction season, supported by its growing downstream backlog and solid levels of new construction work entering the project pipeline. The North America segment is likely to have benefited from strong rebar, merchant bar and wire rods demand. In the Europe segment, the Polish construction market is growing on expanding manufacturing activity. These factors and a strong construction backlog in North America, new contract wins and strength across the key end markets in North America and Europe are likely to have supported the finished steel shipment volumes in the fiscal third quarter.
Commercial Metals’ network-optimization efforts and cost-reduction initiatives are likely to have contributed to margin performance during the quarter under review. The company has been implementing price hikes across its mill products in response to the rapidly-rising scrap costs.
Price Performance
Commercial Metals’ shares have appreciated 18.6% in the past year against the industry’s decline of 6.7%.
Image Source: Zacks Investment Research
Stocks Worth a Look
Here are some stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
AutoNation, Inc. (AN – Free Report) currently has an Earnings ESP of +2.15% and a Zacks Rank of 1. The Zacks Consensus Estimate for second-quarter 2022 earnings has moved up in the past 60 days and is currently pegged at $5.95 per share. This suggests year-over-year growth of 23.2%.
The Zacks Consensus Estimate for quarterly revenues is pegged at $6.8 billion, indicating a decline of 1.6% from the prior-year quarter’s levels. AutoNation has a trailing four-quarter earnings surprise of 27.4%, on average.
F.N.B. Corporation (FNB – Free Report) currently has an Earnings ESP of +2.76% and a Zacks Rank of 2. The Zacks Consensus Estimate for second-quarter 2022 earnings is currently pegged at 30 cents per share, suggesting a 3.2% decline from the year-ago quarter’s tally. The same has moved up in the past 60 days.
The Zacks Consensus Estimate for F.N.B. Corp’s quarterly revenues is pinned at $332 million, indicating a year-over-year increase of 7.8%.
The Kroger Co. (KR – Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter fiscal 2023 earnings have undergone upward revisions in the past 60 days and is currently pegged at $1.27 per share. This suggests year-over-year growth of 6.7%.
The Zacks Consensus Estimate for Kroger’s quarterly revenues is pegged at $43.8 billion, indicating year-over-year growth of 6%. KR has a trailing four-quarter earnings surprise of 22%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.