Does one gender invest better than the other? According to various research studies conducted by Forbes Advisor and Fidelity, this might be the case.
When it comes to commercial real estate, women make up 30% of active property investors in the United States. Although the numbers show an evident gender divide, it is progressively narrowing. The reality is that more women are succeeding as investors. When comparing their investment returns to those of others, data revealed that women consistently outmatch men by a factor of two.
So, out of general curiosity, we decided to embark on an investigative journey to understand how the number of women investing in real estate is rapidly increasing and the elements contributing to this change in mindset.
Many people seem to assume that men are better investors than women. The assumption is that their aggressiveness, risk-taking, and self-confidence perfectly position them to achieve success.
While the latter qualities have their place, they are not necessarily the optimal qualities needed for investing; in fact, research and data show that they’re not. Instead, the subtler skills that women typically possess make them better equipped to make smarter, more lucrative investment decisions.
Studies conducted over the last couple of decades by the University of California, Vanguard, and Wells Fargo show the same results: women trade less frequently and less impulsively than their male peers. In the University of California study, trading less meant a lower rate of loss for women — almost 1% compared with men.
Women are also better savers. On average, they save money at higher rates – 9% of their paycheck as opposed to men’s 8.6%. They also put more money into their retirement plans than men.
Finally, women are seeing vastly different results in their investment portfolios. During the COVID-19 pandemic, female investors saw 14% returns on average, while their counterparts only saw an increase of 11%. All the variables we described – fewer incidents of trading, careful investment, and prudent saving – are likely to have contributed to this startling result.
Yet, as women, we still face obstacles on our path to our success. We battle outdated ideas about gender roles, restricted visibility in our sector, multiple hurdles to our competence as property stakeholders, and ongoing internal doubts when it comes to confidence.
To talk about these issues, we interviewed three industry professionals and explored what needs to happen to close the gap on the issues that currently inhibit the development of female investors.
Leka Devatha, President of Rehabit Homes, Inc., Elizabeth Faircloth, Co-founder of InvestHER, and Nicole Gauthier, President of Wicked Holdings, shared their perspectives on gender challenges, the value of community, and the importance of adjusting mindsets to enable women to have an equal opportunity in the industry:
What were your top three concerns before entering into the industry and are they common amongst the women you’ve met?
“Limiting beliefs: Who would take me seriously? I was young and did not have a lot of money. The only news articles I read stated that there was only a 99% chance that it would go wrong — I took the chance and said I will take the 1%.”
How valuable is the commitment to knowledge, networking, and information sharing as women in this industry?
“Providing a platform that enables others to connect and network with professionals in the market is essential to building confidence in the industry.
"With Real Estate at Work, REAW, my goal is to encourage everyone on their road to financial independence, especially women of all minorities through the success stories of others. I like to use our virtual meetups to inspire others so they know that they can reach success in this industry no matter their background."
"When I receive a message that 'you inspired me to begin my career' it keeps me going; events like these bring value to someone's life."
“For women, information sharing through networking goes hand in hand, I would have an advantage over anyone in terms of knowledge, but what good is that without the network?”
"Creating a community that thrives on sharing knowledge and networking ranks far higher by teaching you how to invest with balance in your life…So many women come into the industry figuring things out by themselves -- then run into obstacles when trying to scale their business, but when you leverage those whom you've connected with, you add value and develop in an area where your experience was limited."
"It's critical to demonstrate to other women that success in this industry is achievable, even as a minority. Sharing our knowledge or achievements paves the way for the next generation of business owners and potential investors."
Do you believe that the shift in mindset needs to advance the industry should come from men or women?
"It must originate from both. For example, women may continue to hold onto limiting beliefs that they may fail without recognizing that they can obtain the same level of success as men in the industry. Men must also recognize that women are just as tough as they are."
"The mindset that I've noticed amongst women is that we find it difficult to boast about ourselves and accept our own merits. Most successful women dim the light on themselves, and I believe we need to embrace our gifts in the areas where we excel."
Where do you see room for growth in enhancing visibility for women?
"As an industry, I believe we ought to treat women and men equally. At conferences, let's ask women the same questions that are given to men, ask us about construction trends, how we find deals, or what are we looking for in deals instead of how we balance our family and business in our day-to-day lives.”
“Lack of representation at conferences and keynote opportunities will hopefully shift. InvestHER is active in providing resources for speakers at events, and we are quick to point out that there are no women represented on stage.”
“We also need to make sure that there is a level of diversity at all commercial real estate-related events to highlight the different backgrounds of women who invest. By doing so, we encourage others to say, “If she can key-note then I can as well. “
“Continuing to create content and putting ourselves out there. I see a lot of room for growth in women panel speakers at some of the conferences. It's rare to see us up there in commercial purchasing roles — let's not highlight the roles that do not allow us to shine big.”
Becoming a woman real estate investor is not without its challenges. But it's far from impossible. Women benefit from nurturing their resources to carve their paths to excellence, consistently exceeding the expectations of others. As the studies demonstrate, they are not only excellent investors but also good influencers working together to expand chances for newcomers along the way.
At InvestNext, our primary goal is to democratize real estate and create an equal playing field for everyday individuals to economically influence the communities they invest in.
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