Why Real Estate Is the Investment Move in 2020

Let’s be real. 2020 has had a rocky start and COVID 19 has been driving us all up against the wall! 

There are some big facts when it comes to real estate investing.

 

1.  Real estate investing is not for everyone.

 

2.  Many people have made countless millions investing in real estate.

 

The Best Wealth Strategy in 2020

 

Stocks vs. real estate. Which is better? There’s no definitive answer and, in fact, many American investors dabble in a bit of both. However, in the current economic climate real estate has become the best move for investors in 2020, especially for new investors. There are two reasons for this: volatility and technology.

 

The Cons of Real Estate Investing

 

1.     Expensive. Real estate has typically been a closed-off option for most investors without a lot of pre-existing wealth. Even when not making full cash deals, real estate investors needed the ability to secure competitive financing arrangements on property purchases, which may include added closing costs. On top of these expenses, the continuing costs of taxes, property management, utilities and upkeep discouraged many investors from choosing the path of real estate.

 

 

 

2.     Time consuming. Compared to stocks, real estate investing required vastly more work. From the research and closing process, to ongoing meetings, to late-night phone calls from tenants and property managers. Even with a property manager to insulate you, real estate investing still required ongoing supervision.

 

 

 

3.     Low liquidity. Compared to the ease of sale with stocks, getting your money out of real estate investments typically had been far more difficult.

 

 

 

4.     Low diversity. In real estate, diversity comes in the form of type (residential, commercial, mix) and location of the market. Values in certain areas can fluctuate or slump, with a lot of factors to balance. Maintaining this balance adds to the time and monetary investment required of the investor.

Why Choose Real Estate?

 

After considering all the cons, why would a savvy investor choose real estate over the stock market in 2020? The giant green gorilla in the room: Returns. While stocks and real estate returns are hard to compare, real estate has averaged returns of 10.71% annually compared to 5.41% in the stock market on a pure value-to-value basis since the year 2000. An undeniably huge difference mainly due to real estate’s lower volatility compared to stocks.

 

 

 

The Future Is Fractionalized

 

The answer to the longstanding disadvantages of real estate investment comes in the form of real estate tokenization. By using blockchain technology, real estate asset ownership is converted into a digital security token that can then be traded on a secure online platform.

Furthermore, this technology allows a single asset to be fractionalized and owned by multiple parties. Yes, a token acts as a smart contract, immutable and non-erasable, guaranteeing ownership rights to the party that holds it, and each transfer of ownership is embedded into that secure token on the blockchain.

 

Tokenization greatly reduces the problem of time consumption we mentioned above. Buying and selling real estate assets is now a process that takes mere seconds instead of days or weeks. Likewise, real estate tokens can be easily transferred between parties, allowing for optimal liquidity. Fractionalization also solves the problem of real estate’s expensive and non-diverse nature. An investor can own a number of tokens in a variety of properties at an incredibly low cost of entry and begin to receive returns.

 

Tokenism takes the advantages even further. By providing property due diligence, A.I.-backed property management, and a secure online marketplace for token trading, liquidity and returns are maximized while reducing the time and labor cost of the investor to a never-before-seen low.

 

Investors of all levels now have access to the value and security of the real estate market without the cons that made it a closed-off asset class for so long, making it the best real estate investment and wealth growth strategy for 2020.

 

Visit Tokenism To start your real-estate investment journey today!