Control
In real estate , you have greater control over the direction and success of your investment . Investors in the stock market depend heavily on the management of the companies they invest in .
However , real estate investors have demonstrated the ability to impact their properties ' success or failure through direct management of their properties or by overseeing the operations of their property managers . Investors can boost returns by reducing vacancies , marketing to potential tenants , renovating and adding value to their properties , and undertaking various other strategies to increase cash flow and force appreciation .
Demand
After oxygen , water , and food , shelter is our most basic need . No matter how low the stock market goes , people will still need a place to stay at night . As we mentioned earlier , multifamily demand continues to grow year after year . As a result , there is more cash flow and less vacancy , and concurrently there is a countercyclical resistance to economic downturns . When homeowners or renters downsize ,
Image by fernando zhiminaicela from Pixabay they often choose to move into multifamily properties . Having a steady cash flow from renters can not only sustain you in a recession , but it can also allow you to take advantage of the discounted assets that will inevitably come onto the market during this period .
Diversification
Within the world of commercial real estate , one can diversify by investing in different types of properties like shopping , retail , selfstorage , multifamily , etc . Multifamily , in particular , is an excellent alternative to traditional stocks and bonds , owing to its ability to withstand recessionary pressures , resistance to stock market volatility , steady cash flow , and potential for asset appreciation .
Predictable Cash Flow
Regardless of whether you acquire a rental property in the multifamily sector , retail , industrial , or shopping , you will benefit from regular cash flow from tenant rents . Cash flow is an excellent benefit on its own , but when used to leverage new property acquisitions through financing , it can be a substantial driver of short and longterm profitability .
After oxygen , water , and food , shelter is our most basic need . No matter how low the stock market goes , people will still need a place to stay at night .
Deferrable Gains
A 1031 Exchange allows commercial real estate investors to defer paying taxes on their gains and instead use that capital to invest in other projects . The 1031 Exchange is named after Section 1031 of the tax code , which allows individuals to sell assets and carry their basis into a new property of equal or greater value . Using the existing tax code , investors can sell investment properties and buy new ones , deferring taxes until the property is sold , or until they engage in another 1031 exchange .
Conclusion
Real estate is a good investment because it brings investors stable cash flow , appreciation potential , tax benefits , and may act as a shelter during recessionary times .
The benefits described above are also available to accredited investors and even to those who are just getting started in wealthbuilding .
If you ’ re looking to get involved yourself , Blue Ocean Capital , offers access to private market real estate , making it possible for qualified investors to access the returns once reserved for institutional investors .
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