Why Brick-and-Mortar Real Estate Makes Sense

Brick-and-mortar has several advantages over investing in paper-based real estate assets. Besides the fact that real estate is almost always a wise choice compared to stocks, the asset class offers both diversification and long-term profit potential. In so many ways, real estate is a smart option during a recession because there are several ways to get involved in the niche. When the securities markets are falling, as they are now, brick-and-mortar real estate can offer a wide range of benefits for investors of all income levels. Here are some of the pertinent details.

Investing in Real Estate for Success

For generating passive income, even if you already have a full-time job, real estate assets can be the ideal way to achieve profitability and a diversified investment portfolio. However, it's essential to know your priorities for real estate investing, mainly because there are dozens of ways to get involved in the market. But in general, during good times or bad, putting at least some of your available capital into real estate offers the chance to earn a steady income from non-paper assets. While instruments like stocks and mutual funds can deliver reasonable returns, they are not hard assets and are just as apt to lose their value as they are to appreciate. Land and buildings are tangible goods that offer investors the chance to take advantage of the benefits of ownership.

Multiple Choices for All Investors

The beauty of smart money investing and parking at least a portion of your available capital in a hard asset like land, buildings, or both, is that there are multiple ways to get involved. Besides offering small vacation rentals in resort locations, working adults who want to create additional income can buy a residential home and place it on the long-term rental market. Others prefer to invest in small commercial properties such as strip mall storefronts. The general idea is to leverage the earning power of rentable structures on land you own. Even offering monthly occupancy for in-house renters who reside in a room in your home can bring in extra cash regularly. When it comes to real estate as an asset class, the possibilities are virtually endless.

Flipping Can Become a Full-Time Business

As opposed to owning paper assets, even those backed by real property like land and buildings, taking possession of an actual house can pay big dividends. The concept behind flipping homes is a simple one:

1. Purchase a fixer-upper at a below-market price
2. Use sweat equity to do some of the repairs yourself
3. Resell the unit for more than you put into it

The beauty of being a flipper is that you can outsource as much of the repair work as necessary and still aim for a potential gain on every transaction. Many people have turned a casual flipping hobby into a full-time job, and the pursuit is one of the better ways to earn extra or primary income during the financial crisis of 2022 and headed into 2023.