One of the main motivations for investing in real estate is the potential for a steady stream of income from unit rentals. This is especially true when viewing it as a long-term investment strategy, with sums accumulating over time, allowing for future reinvestment opportunities.

Investors looking to expand their portfolio and diversify their assets frequently choose real estate to help spread their risks. Since real estate has a low correlation with bonds and stocks, it’s capable of delivering a hedge against unforeseen market volatility.

The value of real estate tends to increase over time, particularly when the properties are well-managed and regularly maintained. This process, referred to as appreciation, has the potential to significantly enhance the overall net worth of investors.

Paying down a mortgage is another effective way to use real estate investments as a source of wealth-building over time. As your equity in a property increases, so too does your leverage for investing in additional real estate to further enhance your cash flow.

Protection from inflation, sometimes referred to as inflation hedging, is another compelling reason many investors opt for real estate. Since the demand for real estate has a positive relationship with GDP growth, it develops higher capital values in line with market demands.

While stocks, bonds, and other funds can be limiting to investors, real estate offers investors the opportunity for a more hands-on approach. Property management and renovation, strategic updating, and other value-increasing measures can all help to increase your ROI.

Real estate investors can also access a range of financing options to further drive returns through positive leverage. Through this process, you can invest in real estate for a fraction of the property’s overall value and avoid prohibitive upfront costs.

The age and structure of a building, combined with factors such as its location, management practices, and asset class, all impact real estate returns. With these factors considered, real estate is capable of delivering competitive, risk-adjusted returns that beat S&P 500 averages.

Architecture has been designed to last, making real estate investment opportunities ripe for handing down to the next generation. It’s a common strategy for those who want to pass down their portfolio of assets to family members for multi-generational investment.