Savvy investors have turned to real estate for more than a century during financial crises, recessions, depressions, and global economic upheavals. There are all kinds of reasons for the phenomenon, but one of the primary ones is that property tends to appreciate in value no matter what the condition of the national and international markets. Investors who don’t want the hassles associated with owning property can opt to buy shares for a much lower cost and avoid the management headaches of traditional ownership.
Keep in mind that compared to stocks and bonds, the underlying assets in real estate are tangible, not paper. So, if you want to diversify a portfolio or take advantage of the low entry cost of property shares, consider all your choices. Here are some of the top reasons investors turn to real property when securities markets are volatile, trending down, or getting ready to enter a corrective period.
Values Tend to Rise
The main attraction of most property-based assets is that their price often rises when intangible things, like stocks and bonds, fall on hard times. Many get spooked when securities markets tumble. In many cases, they flee to safe-haven investments like precious metals, land, houses, and commodities.
You Can Own Shares Instead of Entire Properties
Some avoid real estate because they don’t have the capital to purchase a home or plot of land. The good news is that it is entirely possible to become a partial owner via rental income shares. Like gold, the price of land never reaches zero, its supply is not infinite, and human beings have sought it out as a form of monetary security for hundreds of years.
Such investments are tailor-made for those who want the benefits of ownership without the hassles of dealing with tenants, managing properties, or filling out paperwork. The easiest way to get started is to read a short guide on the subject. It’s crucial to understand the essential differences of real estate vs stocks, and why rental income shares can enhance a portfolio’s ROI.
Tangible Assets for Diversification
Property is a tangible asset, while stocks, bonds, options, futures, and index funds are not. For so many investing enthusiasts, that single fact is enough to convince them to avoid paper-based portfolios and put the majority of their capital into hard assets. Adding real estate-related holdings to a portfolio is an excellent way to diversify. Those who prefer rental shares or other forms of property aim to offset the inherent risk of volatile securities markets, especially during inflationary periods and times of political instability.
Entry Costs are Low
Entrepreneurs always think about the reasons a business might need a loan, but in this instance, you may be able to erase that from your mind. Unlike the traditional real estate market, it’s easy to get into rental property shares without spending a fortune. Because there’s no need to buy entire houses or plots of land, investors can commit as much or as little money as they see fit, based on their particular circumstances. And, because there are no management or operational chores to attend to, investors don’t have to worry about ongoing expenses associated with owning them.