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Benefits of Real Estate Investment

Real estate investing offers countless benefits. There are advantages for everyone, regardless of whether you want to invest in real estate full-time, or just on the side for a little extra income.

You only need one rental property to expose your portfolio
to real estate, after which you will have a steady stream of consistent revenue. Your real estate investments, unlike stock investments, are often less affected by the state of the economy and come with additional benefits:

  • A solid, steady, and ongoing cash flow
  • A hedge against inflation 
  • Portfolio diversification to reduce volatility 
  • Long term security in a tangible asset
 

Analyzing these key benefits in more detail makes it clear why real estate investment is a great option for any portfolio.

1. Solid, steady, and ongoing cash flow

Cash flow generation is a form of passive income, or simply put, extra money in your pocket. Real estate is unique compared to other investments like gold in that in addition to appreciating over time, it also offers a consistent cash return.

Upon purchasing or investing in a rental property, you can sit back and collect profits in the form of rental income each month. This monthly rental income can be used towards paying off the mortgage on the property, as excess income, or be reinvested to further your portfolio’s growth each month through compounding interest. 

2. Hedge against inflation

Inflation is something that is on everyone’s mind in the current market.  Inflation is defined as a general increase in the prices of goods and services in an economy. When prices rise, each unit of currency buys fewer goods and services.

Put simply, inflation means your savings lose purchasing power over time. Historically, your dollar loses roughly 3.2% of its value annually. Recently however, inflation has reached a 40 year high at over 9%. On the other hand, real estate assets have appreciated by an average of 14.5% in the past year.

Real estate has consistently outpaced the rate of the inflation for the past 70 years. It’s not just a hedge against inflation – it’s an opportunity to stay ahead of the curve.

3. Portfolio diversification to reduce volatility

With fears of inflation and a looming recession plaguing the financial markets, the stock market has begun to enter a down-turn. This can wreak havoc on many investors’ portfolios and retirement accounts. In fact, the average stock portfolio is down roughly 14% YTD based on current S&P 500 data. Real estate, on the other hand, has grown over 14% in value over that time.

These stark differences demonstrate the importance of diversification. There are times when stocks outperform real estate, and vice versa. By diversifying, you maximize your portfolio’s ability to adapt to any market conditions. During uncertain times, having a percentage of your funds in stable assets like real estate allows you to stay afloat while waiting for other investments to turn around. 

4. Long term security in a tangible asset

No investment is guaranteed to hold its value over time, but there is something to be said about the long-term security of tangible assets like real estate. For investors seeking protection against all the uncertainties of the world, tangible assets like real estate and gold offer unmatched peace of mind.

The value of intangible assets relies heavily on market conditions and the performance of individual corporations. On the other hand, real estate possesses an intrinsic and permanent value. There is no guarantee that a company you invest in will be around in 10 years, but residential properties will stand for 200 years or more if properly cared for. 

Conclusion

Real estate investing offers numerous benefits and can lead to a strong, healthy portfolio. Although real estate investment may seem daunting compared to the ease of trading in the stock market, it has never been easier to start exposing your portfolio to real estate assets. With Landshare, investors can now invest in real estate with as little as $50 directly on the blockchain through Tokenized Assets.

Landshare allows investors to invest worry free by taking care of tenant management, rent collection, and maintenance woes. Simply select your desired property to invest in, sit back, and relax as monthly rental income is paid out monthly to Asset Token holders.

Unfamiliar with what Tokenized Assets are? Check out our article on Tokenized Assets.

Invest in Tokenized Real Estate with as little as $50 directly on the blockchain through the Landshare platform. Landshare’s property offerings are carefully vetted  and hand selected among thousands of potential options.

View the current offerings at https://app.landshare.io/property-details and get more information on the platform at landshare.io.

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