The real estate market isn’t as volatile as some other investment markets. Stocks values, for example, can fluctuate on a daily basis and these fluctuations are dependent upon multiple societal factors, some directly facing the company and other indirectly. Though real estate values do fluctuate, they don’t shift up and down as quickly as stocks could. The market makes regular and predictable rises that can be leveraged to maximize an investor’s return. Unlike any other asset, land is a commodity like no other because it is finite. Because of the real estate market’s historic and consistent value pattern, and the fact that it is always a commodity makes real estate build wealth more consistently than other asset classes.
Real estate is different from other asset classes because of the cash flow that it creates. When you invest in real estate, it is different from investing in other asset classes because with real estate, the money you are investing buys you cash flow. For example, if an investor purchases a multifamily property, not only do they have the tangible asset, they also have now bought an asset that generates income, rather than buying an asset, like a stock, and waiting/hoping for the value to increase to realize some return. In real estate, you can start earning your initial investment back relatively quickly, instead of having to realize a profit when a sale has been made. This method is the reason man real estate owners build wealth, especially over time. They invest their money in buying multiple streams of revenue.
Historic patterns in the real estate industry have shown that it is likely that the longer you hold onto a piece of property, the larger your return will be. Uniquely, real estate is also a tangible asset. For example, one can use a multifamily home as an investment method, but since it is a tangible item that is being invested in, it could also be multipurpose as a home for the investor. Real estate is different than other investments because it serves the investor in multiple ways. One can put their money into a property, and while that money is working for them, appreciating in line with the market, they can actually use the property for multiple purposes which adds value to the investment for the owner.
For more information contact Casandra Properties at 718.816.7799 or email info@CasandraProperties.com.