Real Asset Investments


During periods with significant market volatility, many investors begin to seek more stable, real assets, such as oil and metals commodities because they have intrinsic value. Investment property, such as land, residential, and commercial property, is also a real asset.


Land may be a somewhat risky investment because owners must pay the expenses, such as property tax, whether the land is producing an income or not. In addition, land is not a source of passive income unless it is leased as farm or ranch land. Land investments also require knowledge of local zoning allowances, environmental issues and access to utilities and, sometimes, to the land itself.

However, land in an area where future development is expected may have significant returns in the future. In addition, land typically appreciates in value, so the investors may hold the land in their portfolios, waiting for it to reach a target value.

Residential Properties

Residential properties include single-family homes and multi-unit buildings, such as apartments or townhouses. If they are used as rental properties, they provide regular, passive income. In addition, all rental property expenses are tax deductible.

If the investor’s goal is to complete minor changes and resell the property quickly, the owner’s capital is only inaccessible for a short period of time. In addition, the property may be sold for significantly more than it was purchased for.

Commercial Properties

Commercial properties include retail, restaurant or office space. These properties may be risky because their valuation is complicated. For example, most residential property values are based on comparisons of the homes in the area, while commercial properties are valued based on the business within them and how much income they make.

Although commercial properties have more complex leasing agreements, owners can make a significantly higher profit on renting commercial property than land or residential property.

If you want to diversify your investment portfolio, you may want to consider investing in land, residential property or commercial property.

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