S
oaring mortgage rates have made homeownership more expensive, yet many financial experts still recommend real estate as a top investment choice. However, the allure of speculative markets like cryptocurrency and art has captivated some investors. Crafting an effective investment strategy depends on several factors: budget, time horizon, risk tolerance, and effort.

    Homeowners with significant equity in their homes may use this as leverage to buy an investment property through a home-equity loan or HELOC, said Hannah Jones, senior economic research analyst at Research.com. However, investing in real estate is not a guaranteed success in all markets due to high home prices and elevated mortgage rates.

    While year-over-year growth in real estate may lag the S&P 500, a longer-term view reveals its strength. A Realtor.com analysis shows an average five-year return of 26% since 1975. Homeowners have seen a significant increase in housing wealth, with the average homeowner gaining at least $147,000 in the past five years.

    "Traditional investments like 401(k)s and ETFs are great for passive growth, but real estate brings a whole different level of wealth," said real estate investor and broker Dan Reedy.