Real Estate Investmet Ideas

Real estate investment is the purchase of a future income stream from property and can offer several advantages over other types of investments, including potentially higher returns, stability, inflation hedging, and diversification. Here are some of the key reasons to consider investing in real estate.

Competitive Risk-Adjusted Returns

Critics argue that the low volatility characteristic of real estate is the result of infrequent real estate transactions and property values often determined by third-party appraisals, which tend to lag the market. The infrequent transactions and appraisals result in a smoothing of returns, as reported property values underestimate market values in an upturn and overestimate market values in a downturn.

High Tangible Asset Value

Unlike stocks, and to some extent, bonds, an investment in real estate is backed by a high level of brick and mortar. This helps reduce the principal-agent conflict or the extent to which the interest of the investor is dependent on the integrity and competence of managers and debtors.

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