Three reasons why investors prefer real estate over stocks



Submitted by Ashcroft Capital – Two common forms of investment strategies that smart investors use to increase their wealth through passive income include building a diversified stock portfolio and investing in real estate. While investing in the stock market is beneficial for many reasons, investing in real estate in the private market, such as apartment buildings, offers several benefits. Here are three important reasons why some investors prefer multi-family private placements to investments in the stock market.


Stocks can have volatility that is not typical of most private placement offerings. Real estate provides long-term cash flow, passive income, and the promise of increased value (1).

The stock market is particularly vulnerable to several different forms of risk, including economic, inflationary and market risks. This instability can arise due to company-specific or geopolitical events. The US real estate market has been strong for over a decade. Since 2010, the national housing market has added $ 11.3 trillion in value – more than 50% (4).


If you sell the property you have invested in and invest the proceeds in the purchase of a similar property, your capital gains taxes may be deferred to a later date, which is called a 1031 (3) deferred tax exchange. During this process, the qualified intermediary will withhold the proceeds from the sale until the money is transferred to the seller of the other property. Participation in 1031 avoids 15-20% of the long-term capital gains tax rate (5).


Over time, the value of the dollar increases as a result of inflation. While the value of a currency will invariably rise over time, inflation is not always constant. As inflation rises, the value of everything rises, including real estate (2). When the value of a property rises, the property owner can charge more for rent, which provides a higher income stream. Keeping pace with inflation gives you an advantage that is difficult to obtain with investments in the stock market.
It’s never too early to start earning passive income. Placing some of your money in a private placement for multiple families can help you balance your portfolio and reduce the likelihood of loss. To help you on this journey, download this free 20-page guide to understanding private real estate placements.

  1. Investopedia. “Reasons to invest in real estate versus stocks
  2. Forbes. “How buying a home can hedge inflation.
  3. Internal Revenue Service. “Exchange IRS 1031.
  4. Zillow. “The recovery added $ 11.3 trillion to US home values ​​in the 2010s.
  5. Investopedia. “Exchange rules 1031: what you need to know.

DISCLAIMER: Ashcroft Capital LLC is not an investment advisor or broker-dealer and is not registered with the US Securities and Exchange Commission. The information provided in this email should not be used as the sole basis for making any investment decisions, is not intended to be used as advice regarding the advisability of investing, buying or selling securities, and should not be construed as advice designed to meeting the investment needs of any particular individual or entity or any particular investment situation. Nothing in this advertisement constitutes legal, accounting or tax advice or individual investment advice. The reader assumes responsibility for conducting their own due diligence and assumes full responsibility for any investment decisions.


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