Real Estate

Real Estate Returns vs S&P

21.70%

Versus S&P

-21.10%

19 hours ago

21.70%

Versus S&P

-21.10%

19 hours ago

6m High

6m Low

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Real Estate

358.88

290.10

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S&P 500

4,582.64

3,585.62

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Real Estate

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S&P 500

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Does not follow the stock market

Sources: S&P/Case-Shiller U.S. National Home Price Index, SPX

In the Market

Check out Real Estate in the stock market

Highlights

Good For

Hedge inflation + passive income

Time Horizon

5-10 years

Diversification

Relative to a traditional portfolio composed of 60% large-cap stocks and 40% bonds, a portfolio which includes some allocation to private real estate has historically shown the ability to drive higher returns, with generally more annual income and lower volatility over the past 20 years. Real estate has the power to hedge inflation. With increases in inflation in 59 of the last 60 years in the US, the ability to hedge these increases is a valuable trait in an investment. Real estate specifically is a unique asset because unlike others, it can earn income while hedging inflation.

Did you Know

  • poitStar

    There’s more money invested in real estate than in equities in the U.S. stock market.

  • poitStar

    Ellen DeGeneres has become known for her house flipping expertise, spending over $145m buying properties to flip.

  • poitStar

    The value of all real estate investment trusts (REITs) in the US is $1.24 trillion.

Considerations

    Reasons to Invest

  • Good source of passive income

  • Investment in a tangible, physical asset

  • Low volatility means more consistent returns

    Drawbacks

  • Direct ownership of real estate is an active investment. You'll be putting in time and sweat equity to renovate, maintain, and rent out your properties.

  • There's a learning curve to real estate investing. You'll want a good understanding of local real estate markets, property laws, and maintenance, for example.

  • While real estate can offer passive income, that income is usually variable and can be heavily impacted by economic cycles and changes in local laws.

How You’re Taxed

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How You’re Taxed

Capital Gains

Capital Gains

Short-term capital gains are from selling assets owned for one year or less, which are taxed at ordinary income tax rates. Long-term capital gains are for assets owned for more than a year, and are taxed at a lower rate than ordinary income, with rates ranging from 0% to 20% depending on your total taxable income.

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