Real Estate Vs. Risky Assets! Where Do You Want To Put Your Capital To Work?

Dana on February 1, 2022

Real Estate Vs. Risky Assets!

Where Do You Want To Put Your Capital To Work


After an incredible run of almost every asset class in the past 18 months, investors are now facing an important decision. Where to put their capital to work?


As investors are closely looking at the new market developments and the next steps in the corresponding monetary outlook, the market sentiment is now transitioning from riskier asset classes towards safer investments.


Which of these safer investments would be the best option for investors in the current environment?


Equities and bonds


Equities might offer the highest rate of return but at the same time this asset class carries the highest risk that even your invested principal could be wiped out.

Government bonds offer the lowest investment risk, but their returns are so low at the moment that a potential investment in this asset class could produce a negative yield in an above than average inflationary environment.


Real estate


As investors ask themselves if the current inflation will gradually subside in the coming months and what will be the monetary policy outlook in 2022 and beyond, the demand for real estate is rising.


Real estate investors have the opportunity to take on more leverage as part of their investment project and take significant advantage of tax benefits.


Real estate does not have the same liquidity advantage as equities or crypto currencies but it provides much more stable value, passive income and future property value appreciation.


Wealth protection


During uncertain times, investors tend to resort to safety to protect their wealth.


Stocks, crypto and other risky asset classes tend to be much more volatile during such periods. With current low and unattractive yields from certificates of deposit, fixed-income and government securities, real estate has usually been a primary preference of investors as an attractive and relatively stable destination to put their capital to work.


Historically, real estate has been one of the top investor choices as a hedge against inflation. Investors might take defensive measures and offset the future potential high inflation through strategic investments in real estate that will could not only offer them wealth protection but also a stable cash flow and future investment appreciation.

Booming demand for multifamily housing

Not all real estate investments offer the same returns.

Office and retail space have been very attractive investment areas in the past, but they depend on a number of anchor tenants that are not easy to replace if things do not work as planned.

Multifamily housing has become the strongest leg in real estate for investors seeking stable and attractive returns by offering a rental income from a diversified pool of tenants, that make investments in multifamily housing an excellent proposition.

Net demand for market rate apartments in 2021 was at record high 673 000 units. This has been the highest in three decades and smashed the previous record from 2000 by 66%.

On the supply side, nearly 360,000 market-rate apartment units completed in 2021. That number has been the biggest addition in more than three decades. Another 682,000 units are under construction. Of those, roughly 426,000 are scheduled to complete in 2022⁠—marking the first time since 1987 supply will exceed the 400,000-unit mark.

Downsizing baby boomers, millennials, and Generation Z with a strong renting over buying preference largely contribute to a strong the demand for multifamily housing that could continue to flourish in 2022 and beyond.


Multifamily renovation and repositioning


The rising investor interest for multifamily is creating a very competitive market for the most attractive opportunities.


Real estate investors that can look ahead of everyone else and focus on hidden gems in the market that will be the future hot spots or find attractive multifamily properties that need renovation or repositioning could enjoy the best returns.


Every investment carries specific opportunities and risks associated with it, so investors need to make their own research and make an independent decision based on their risk tolerance, preference and investment goals.


Strategic partner selection


Making a selection of the right strategic partner with a proven track record that can execute the entire process without any delays, higher construction costs and loss to lease provides an incredible value and excellent ROI for future real estate investors.


Seeing the final product of your investment project and getting what you want, on time and without any stress in the process is simply priceless.

Ready to start your next investment project?

Please contact us to learn how we can best help you to turn your next investment project into a success.


Telephone: (954) 570-0300

Address: 850 SE 7th Street, Deerfield Beach FL 33441

About Adivo Construction

We are a national general contractor with over 50 years of combined construction expertise specializing in the value-add improvements of apartment communities.

Our mission is to assist our clients in finding the right balance between capital expenditure and appreciation potential by designing and executing customized renovation programs that are focused on increasing cash flow return and overall return on investment.

We have completed over 100 repositioning projects for publicly traded and privately held domestic and foreign companies in states such as Florida, Texas, Kentucky, Oklahoma, Georgia, South Carolina, Utah, North Carolina, Tennessee, Indiana, Michigan, Missouri, Arkansas, Ohio, Arizona, Nebraska, and Kansas.


Post a comment