INVESTING IN REAL ESTATE.
... is a more attractive asset class than public equities in terms of cash flow generation.
... is less volatile, more predictable and has the return profile of higher risk asset classes.
WHY REAL ESTATE IS GREAT INVESTMENT
• Investors benefit from immediate cash flows from their investment: 6 to 7% on average (with the potential to increase to 9% when leveraged optimally) while the dividend yield of the S&P 500 index is as low as 1.87%.
• Real estate is a productive asset: it performs a function in everyday life. For retail, industry, office, farming or living, people will always need buildings.
• The value of real estate has built-in appreciation as construction costs increase with inflation.
• Real estate investment is a tax-efficient investment. In this case, we handle all aspects of Canadian tax, avoiding double taxation with your country of residence.
• The physical safety of the investment asset is protected by insurance: this is obviously not the case of public equities and other private equity asset classes.
• Real estate is a stable asset class with low volatility. Even if the valuation decreases in recession (which is not always the case), cash flows remain predictable and regular.
• While it is not as liquid as public equities, it remains possibly the most liquid private equity asset, especially in an economy like Canada’s.
• Stock, bond, commodity markets are highly volatile due to cycles. Real Estate market offers great diversification. Real estate investment is supported by the inelastic demand of almost every consumer in the market.