About Real-Estate: What is Real-Estate Investing

Real estate has been one of the most popular investment vehicles over the last few decades. Learn more about this highly-rewarding asset class and how it can help you build a stronger investment portfolio.

Real Estate
Inflation
About Real-Estate: What is Real-Estate Investing

Building the right tech stack is key

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How to choose the right tech stack for your company?

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What to consider when choosing the right tech stack?

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What are the most relevant factors to consider?

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What tech stack do we use at Techly X?

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Building the right tech stack is key

Lorem ipsum dolor sit amet, consectetur adipiscing elit lobortis arcu enim urna adipiscing praesent velit viverra sit semper lorem eu cursus vel hendrerit elementum morbi curabitur etiam nibh justo, lorem aliquet donec sed sit mi dignissim at ante massa mattis.

  1. Neque sodales ut etiam sit amet nisl purus non tellus orci ac auctor
  2. Adipiscing elit ut aliquam purus sit amet viverra suspendisse potent
  3. Mauris commodo quis imperdiet massa tincidunt nunc pulvinar
  4. Excepteur sint occaecat cupidatat non proident sunt in culpa qui officia

How to choose the right tech stack for your company?

Vitae congue eu consequat ac felis placerat vestibulum lectus mauris ultrices cursus sit amet dictum sit amet justo donec enim diam porttitor lacus luctus accumsan tortor posuere praesent tristique magna sit amet purus gravida quis blandit turpis.

Odio facilisis mauris sit amet massa vitae tortor.

What to consider when choosing the right tech stack?

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  • Neque sodales ut etiam sit amet nisl purus non tellus orci ac auctor
  • Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti
  • Mauris commodo quis imperdiet massa tincidunt nunc pulvinar
  • Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti
What are the most relevant factors to consider?

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“Nisi quis eleifend quam adipiscing vitae aliquet bibendum enim facilisis gravida neque velit in pellentesque”
What tech stack do we use at Techly X?

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Real estate has been one of the most popular investment vehicles over the last few decades. While traditionally, real-estate investments consisted of buying and selling residential and commercial properties, there are multiple lucrative ways to invest in this highly-rewarding asset class today. 

Types of Real Estate Investments

Real estate investments come in many different forms. However, the majority fall into two categories: non-physical real estate investments such as REITs (Real Estate Investment Trusts) and crowdfunding platforms, and physical real estate investments such as land, residential and commercial properties.

Real Estate Investment Trusts (REITs)

REITs are like mutual funds in that both allow investors to pool their money in order to purchase a piece of commercial real estate, but there are several key differences. For starters, REITs distribute at least 90% of their taxable income to shareholders each year.

Individual investors can earn money from real estate without having to own, manage, or finance any properties themselves. Most revenue generated by equity REITs comes from real estate property rent, whereas mortgage REITs receive income from interest earned on mortgage loans.

Real estate investment trusts, or REITs, have been established since the 1960s and allow investors to make real estate investments without acquiring any property.

A real estate investment trust buys properties such as condominium complexes, apartment buildings, hotels, office buildings, storage centers, retail outlets, or other similar structures and leases them to tenants. Investors purchase REIT shares. The REIT’s rent is delivered to investors in the form of dividends.

REIT investors are often institutional. This is because they are complex financial tools that the average retail investor may find challenging to understand. 

Mutual funds can be used to invest in REITs. This method helps investors get the gains achieved from investing in real estate while minimizing the risk. 

Crowdfunding

Crowdfunding is a method of raising capital that involves a large group of people. Real estate crowdfunding is this concept, but much more specialized. 

If a person wants to invest in real estate but does not want to own or maintain a property, they can become a shareholder in a crowdfunding firm. Any earnings directed to the real estate venture are passed on to the investor. But be cautious; crowdfunding is an unregulated field at the moment, and you should conduct due diligence.

Physical Real Estate

Investing in physical real estate involves a single investor purchasing a property. It can include:

  • Residential real estate: Property used for residential purposes. Family homes, duplexes, condos, cooperatives, townhouses, and multifamily housing are all examples.
  • Commercial real estate: Apartment complexes, gas stations, grocery shops, hospitals, hotels, offices, parking facilities, restaurants, shopping centers, stores, and theaters.
  • Industrial real estate: Any property utilized for manufacturing, production, distribution, storage, or research and development.
  • Land: Undeveloped property, vacant land, and agricultural fields such as farms, orchards, ranches, and forestry.
  • Special purpose: Property utilized for a specific function, such as cemeteries, government buildings, libraries, parks, houses of worship, and schools.

Direct vs Indirect

Investors must understand the critical distinctions between direct and indirect real estate investing, which have substantial implications for risk, returns, and diversification.

Direct Real Estate Investing

Direct real estate investing entails buying a stake in a single property. In the case of equity investments, this would mean taking a stake in a company that directly owns an asset such as an apartment complex, shopping center, or office building. 

Indirect Real Estate Investing

Purchasing shares in a fund or a publicly or privately held corporation is a standard indirect real estate investing method. Buying shares of non-listed or openly traded real estate investment trust (REIT) equities is a frequent first step for investors. REITs are in the business of owning and managing real estate holdings. As a result, classic REITs are essentially investments in the landlord’s operating profitability rather than the underlying assets themselves.

The benefits of investing in indirect types of property investments include the broader scale to which the investor has access. Furthermore, it is a passive form of investment, which means that the investor does not have to deal with day-to-day issues such as rent collection and maintenance. A property fund will be professionally managed and the investor will receive income in the form of dividends.

Risks of Real Estate Investing

  • Volatility: Real estate as an asset class can be volatile.
  • Complexity: Most people must be both landlords and investors. Moreover, mortgages, titles, insurance, negotiation, selecting the right investment property, and other aspects must be known ahead of time.
  • Cash Flow Concerns: When there are vacancies, cash flow concerns can occur.

Real Estate As a Hedge

For a variety of reasons, real estate is an excellent inflation hedge. First, consider the impact of inflation on debt. As the value of a home rises over time, the loan-to-value of any mortgage debt decreases, acting as a natural discount. As a result, your property’s value grows while your fixed-rate mortgage payments remain unchanged.

Real estate can also be a useful inflation hedge because property values tend to rise steadily over time. For example, most homes that hit an all-time low when the real estate market crashed in 2008 were resold in less than a decade. Real estate investments can also provide recurrent income and keep up with or outperform inflation in appreciation.

How Hedgeful Invests in Real Estate

Real estate has been one of the most stable investments in recent years, but that does not mean it is immune from market fluctuations.

At Hedgeful, we aim to provide investors with a transparent view of this complex asset class by breaking down essential topics such as market trends and critical investment fundamentals of real estate instruments like REITs. Hedgeful allows you to invest in real estate-backed securities and provides an opportunity for investors to gain exposure to the real estate market through securities.

Real Estate
Real Estate
Inflation
Inflation