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
•
a day ago
13.70%
Versus S&P
•
a day ago
6m High
6m Low
Real Estate
320.27
280.84
S&P 500
4,796.56
3,666.77
Real Estate
S&P 500
Does not follow the stock market
Sources: S&P/Case-Shiller U.S. National Home Price Index, SPX
Good source of passive income
Investment in a tangible, physical asset
Low volatility means more consistent returns
Reasons to Invest
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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.
+7.8%
Avg Annual Returns
Past 10 years
Ways to Invest
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
Compared to
Real Estate
S&P 500
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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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.
Drawbacks
Not the right asset for you?
Projections
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Projections
Monthly contribution
Compared to
Total Invested
Potential High
Potential Low
Real Estate
$0
$00%
$00%
Bond
$0
$00%
$00%
Real Estate
Potential High
$00%
Potential Low
$00%
Bond
Potential High
$00%
Potential Low
$00%
Compare Asset Classes
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Compare Asset Classes
Asset Name
Risk Score
Oil
26+40.8%Wine
35+29.2%Sports Cards
27+27.8%Residential Real Estate
12+20.1%
How You’re Taxed
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How You’re Taxed
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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Did You Know?
There’s more money invested in real estate than in equities in the U.S. stock market.- Ellen DeGeneres has become known for her house flipping expertise, spending over $145m buying properties to flip.
- The value of all real estate investment trusts (REITs) in the US is $1.24 trillion.