It's well known that real estate can be one of the most reliable forms of investment. Some may even call it an evergreen asset, meaning that it will be beneficial for your portfolio regardless of the current economic climate and state of the industry. However, there are different types of properties that can work better for your investment needs. Let's take a closer look at some real estate assets that perform well under economic stress.
Many people choose to add property to their investment portfolio because it can bring the owner reliable passive income. This level of financial security is not always easy to come by for those looking to put their money into an industry with considerable ROI. Adding real estate to your list of investments can be a good diversification strategy because other forms of investment may be more volatile. In times of stress and uncertainty, property investment could provide some stability.
If you buy a duplex or another house that you intend to rent to tenants, this is a form of investment that is often touted as one of the most reliable. While it does come with its own risks, residential real estate can be a welcome addition to any portfolio. There are certain areas that are more stable than others, and the type of real estate is also important when it comes to securing a potential evergreen asset. According to The Guardian, about 1.3 million people in Australia rent their homes, which offers the owners of the property some level of financial security.
Similar to the residential version, the success of a commercial rental real estate investment depends on the situation and your particular piece of property. In some cases, commercial rentals are slightly more volatile than residential real estate. For example, companies that rent office spaces can go out of business. The local and national economy has a large impact on the rate of commercial rentals. After the impact of COVID-19 shutdowns, business rentals have begun to stabilise.
The truth is that even the most stable investments have some level of risk, which you should be aware of before adding anything to your portfolio. The same sentiment holds true for the different kinds of real estate properties that are available with the intention of adding to your passive income sources. Are you interested in learning more about what you should consider investing in when it comes to real estate? Reach out to Ray White Surfers Paradise today.
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