Real estate investment - an attractive and versatile option

Real estate is a popular and attractive investment asset among many investors. Of course, like any other investment, there are pros and cons to the asset class, as well as risks associated with the investments. In this article, you can learn more about investing in real estate.

Real estate investment

Real estate investing is a dynamic and versatile investment strategy that spans a wide spectrum of property types, from residential to commercial, hotels and logistics properties. Each of these property types brings its own unique risks and potentials to the real estate market.

Rental income and value increases

A crucial factor affecting real estate investments is the different types of tenants that properties attract. Tenants form the basis of the return on investment that real estate investors can expect to achieve. This return consists not only of the property's increase in value, but also the stable rental income.

This creates a diversified mix of returns, some of which may come from potential appreciation of the property over time, while others come from the regular rental income. An interesting facet of real estate investing is that in some cases, the fixed rental income can provide a form of inflation hedge. This is due to the ability to adjust rent levels in line with inflation, and in some countries it is even common to adjust new leases in line with the net price index. This further helps to protect investors from loss of value due to inflation.

Low correlation with traditional assets

A notable characteristic of real estate investments is their low correlation with traditional liquid asset classes such as stocks and bonds. This makes real estate investments resilient to market downturns and sudden short-term declines in traditional markets, also known as "flash crashes". Due to the relative illiquidity of real estate, it is not affected in the same way as more liquid assets during such volatile market conditions. This characteristic makes real estate investments an attractive diversification option for investors looking to minimize risk in their portfolio.

At the same time, the property's infrastructure is an essential factor for a successful real estate investment. Infrastructure includes everything from transport links and proximity to amenities such as shopping centers and schools to the overall state of the property's maintenance and accessibility. A well-functioning real estate infrastructure can help increase the attractiveness of the property to potential tenants and thus support a stable source of income for investors.

All in all, investing in real estate is a strategy that combines capital appreciation, stable rental income, inflation hedging and diversification. Real estate as an investment presents an opportunity to participate in the real estate market and benefit from the unique characteristics that make this type of investment attractive and resistant to volatility in traditional financial markets.

Curious to hear more?

At Selected Alternatives, you can access real estate investment through our alternative investment fund - the Selected Alternatives fund, which also includes solar, wind and green infrastructure.

The investment is only suitable to experienced investors as defined in the Financial Services (Experienced Investors Fund) Regulations 2020. Furthermore, the minimum investment is EUR 100,000 and is subject to compliance with our subscription and onboarding process.

To learn more about your investment opportunities in wind energy, please fill out the form below.