Top 4 most popular

Real Estate

10% of MoneyMade members invest in Real Estate

Real Estate Returns vs S&P

13.70%

Versus S&P

-19.70%

a day ago

13.70%

Versus S&P

-19.70%

a day ago

6m High

6m Low

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Real Estate

320.27

280.84

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S&P 500

4,796.56

3,666.77

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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

    Reasons to Invest

  • Good source of passive income
  • Investment in a tangible, physical asset
  • Low volatility means more consistent returns
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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.

Real estate has a well-earned reputation for being a reliable source of passive income.

avg

+7.8%

Avg Annual Returns

Past 10 years

Ways to Invest

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Want to keep it traditional?

Check out Real Estate in the stock market

Risk Analysis

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Risk Analysis

As of 07/02/2022

Low

Compared to

S&P 500
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Real Estate

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S&P 500

Low

Private real estate has historically demonstrated low correlation with both publicly traded stocks and REITs, especially during the past three major economic crises. Since 2013, real estate has ranked as a top investment pick, with 35% of Americans choosing it as the best long-term investment over other assets like stocks and mutual funds (chosen by 21%), savings accounts (17%), gold (16%), and bonds (8%).

Key risks include bad locations, high vacancies, lack of liquidity, and the unpredictable nature of the real estate market. Investing through pooled investment vehicles such as REITs or real estate crowdfunding platforms can help to mitigate these risks.

Drawbacks

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    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.
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Projections

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Projections

Monthly contribution

$

Compared to

Bond

Total Invested

Potential High

Potential Low

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Real Estate

$0

$00%

$00%

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Bond

$0

$00%

$00%

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Real Estate

Potential High

$00%

Potential Low

$00%

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Bond

Potential High

$00%

Potential Low

$00%

Compare Asset Classes

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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.

Did You Know?

  • poitStarThere’s more money invested in real estate than in equities in the U.S. stock market.
  • poitStarEllen DeGeneres has become known for her house flipping expertise, spending over $145m buying properties to flip.
  • poitStarThe value of all real estate investment trusts (REITs) in the US is $1.24 trillion.

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