US real estate

Three reasons investors prefer real estate over stocks


Presented by Ashcroft Capital – Two common forms of investment strategies that smart investors use to grow their wealth with passive income include building a diversified portfolio of stocks and investing in real estate. While investing in the stock market is beneficial for many reasons, investing in private market properties such as multi-family offers several advantages. Here are three important reasons why some investors prefer multi-family private placements to equity investments.

Stocks can have a volatility not found with most private placement offerings. Real estate provides long-term cash flow, passive income, and the promise of appreciation (1).

The stock market is particularly vulnerable to several different forms of risk, including economic, inflationary and market risks. This volatility can arise due to geopolitical or company specific events. The real estate market in the United States has been strong for over a decade. Since 2010, the national housing market has added $ 11.3 trillion in value, an increase of over 50% (4).

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If you sell a property you’ve invested in and invest the proceeds in buying a similar property, your capital gains taxes may be deferred to a later date, called a 1031 (3) tax-deferred swap. During this process, a qualified intermediary will hold the proceeds of the sale until the money can be transferred to the seller of the other property. Engaging in a 1031 avoids the long-term capital gains tax rate of 15-20% (5).

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Over time, the value of a dollar increases due to inflation. While the value of money will invariably increase over time, the rate of inflation is not always constant. As inflation rises, the cost of everything rises, including real estate (2). When property values ​​rise, the landlord may charge a higher rent, which ensures a higher source of income. By keeping pace with inflation, you gain an advantage that is difficult to obtain with stock market investments.
It’s never too early to start generating passive income. Placing some of your money in multi-family private placements could help you balance your portfolio and reduce the potential for losses. To help you on this journey, download this free 20-page guide to understanding real estate private placements.

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  1. Investopedia. “Reasons to invest in real estate versus stocks”
  2. Forbes. “How Buying a Home Can Protect Against Inflation.”
  3. Internal Tax Service. “IRS 1031 Exchange”.
  4. Zillow. “The recovery added $ 11.3 trillion to US home values ​​in the 2010s.”
  5. Investopedia. “1031 Trading Rules: What You Need to Know.”

DISCLAIMER: Ashcroft Capital LLC is not an investment adviser or broker and is not registered with the United States Securities and Exchange Commission. The information presented in this email should not be used as the sole basis for any investment decision, nor intended to be used as advice regarding whether to invest, buy or sell securities, nor should not be construed as advice designed to meet the investment needs of any particular person or entity or any specific investment situation. Nothing in this advertisement constitutes legal, accounting or tax advice or personalized investment advice. The reader assumes responsibility for performing their own due diligence and assumes full responsibility for any investment decisions.


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