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More money has been made in real estate than in all industrial investments combined.
Jeff Bezos knows this its why he backed the fractional property investing platform Arrived.
So why do the wealthy love real estate so much?
Here are sevenreasons why wealthy people love to invest in real estate.
Cash Flow
As an asset class, real estate does an exceptional job of generating cash flow.
Its no surprise that passive real estate income constitutes a significant portion of many millionaires and billionaires total income.
Financial advisor Kevin Chancellor ofBlack Lab Financial Serviceshas seen this many times among wealthy clients.
Whether you are a billionaire or a mom-and-pop property owner, real estate is an outstanding income-producing asset.
Cash flow from real estate almost always improves over time as well.
Appreciation
In addition to generating income, real estate typically appreciates over time.
Sometimes, this happens slowly, inching up one to three percent in a year.
At other times, property values skyrocket at many times that pace.
This is the reason why wealthy people have used it for hundreds of years.
Real estate leverage is incredible.
you could also build a side business around investing in rental properties.
Landlording is a part-time job, not a source of passive income.
Even so, you have plenty of options to invest passively in real estate.
You could also invest in REITs, of course, but beware that they dont offer much diversification benefit.
It adds another level of diversification that is not correlated with the markets, added Chancellor.
you’ve got the option to even write off some paper costs such as depreciation.
Thats the power of real estate in your portfolio.
That means theyll pay the going rate, whatever the value of the currency.
In fact, rents are one of the primary drivers of inflation, not the other way around.
The rich love real estate for good reasons.
Consider taking a page out of their book to build your own recession-resistant, income-producing portfolio.
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