How Real Estate Serves As Hedge Against Inflation
Real Estate Vs. Bonds
The secret is written here, would you like to read it?
Real estate can rival the safety of bonds with a much higher return if carefully invested in..
The real advantage real estate holds over bonds is the time frame for holding the investments and the rate of return during that time. Bonds pay a fixed rate of interest over the life of the investment, thus purchasing power with that interest drops with inflation over time. Rental property, on the other hand, can generate higher rents in periods of higher inflation.
Bonds…
Bonds function as a loan that a company pays back over time with interest. This, of course, makes bonds less volatile than stocks.
However, bonds are not liquid and do not offer the same returns as most other investments. While bonds are relatively safe, they do not offer impressive returns like other investment strategies.
Typically, the safer the bond, the lower the interest rate of return.
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Real estate investments have the power to unlock endless opportunities if you commit to it.
Real Estate vs Gold
Of course, as safe as gold may be considered, it still fails to remain as attractive as real estate.
Here are a few reasons investors prefer real estate over gold:
- Unlike real estate, there is no financing and, therefore, no room to leverage for growth with gold investments.
- Gold proposes no tax advantages unlike real estate investments.
- In contrast to real estate rental, there is no income potential.
- If gold does go up in value, the gain is nominal rather than an actual increase in buying power.
- Gold can easily be stolen whereas duly titled documented real estates cannot be stolen or hijacked since its documentations have been properly registered at the State Land Bureaucracy where transfer of ownership can be duly certified on request of ownership.
A good reason is that “Certificate of Occupancy ” is issued once in a property lifetime.
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