Commercial real estate investment can be seen as a solid hedge against inflation concerns

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You need look no further than your gas pump, grocery store, or big-box store to know that inflation in the United States reduces income and investment.

The level of inflation fluctuated between 2% and 5%, which depressed the value of cash savings and fixed income investments.

One asset that could provide a hedge against inflation is land ownership. According to the Massachusetts Institute of Technology’s Department of Economics, retail businesses and apartments are inflation hedges.

Investors watching the financial markets have not seen consistent security. With inflation causing massive shifts in the values ​​of stocks and cryptocurrencies and Russia’s invasion of Ukraine leading to global tensions, the stock market has been on a frantic ride in 2022.

Investors sometimes depend on residential real estate to balance a portfolio. According to Zillow Group Inc. ZG, the U.S. real estate market was estimated at around $49.3 trillion in 2018. The residential market accounted for $33.3 trillion of that total and the commercial market for $16 trillion. The total capitalization of stocks in the US stock market was $30.4 trillion.

Although there are many advantages and disadvantages associated with real estate investment in the private and public sectors, the low volatility of real estate investment can sometimes give an advantage in the market.

According to a Stanford University study, residential real estate has historically been a safe haven investment in times of inflation. The study also found that with the inflation of the 1970s, house prices rose relative to the size of the economy.

“Owners of residential and commercial real estate are often better off in times of rapid inflation than owners of stocks or bonds, say economists, according to a report by News is NWSA the wall street journal. “Rents for offices, retail and apartments are generally tied to consumer prices and rise with inflation, driving up property income. Inflation also makes construction more expensive, which benefits homeowners as they can expect less competition from new buildings.

The bottom line of this investment scenario is that real estate investing can help diversify your portfolio while hedging your risk against the stock market. This makes real estate a potentially safer investment option than an ever-volatile stock market. The risk of putting your own money to invest can also be minimized because real estate offers multiple financing options. Investors have also traditionally financed their real estate purchases by applying for a loan.

JPMorgan Chase & Co. JPM predicted that the year ahead looks positive, with a rebound in the retail and multifamily asset classes and industrial prosperity. The company also says commercial real estate is finding innovative ways to increase the supply of affordable and workforce housing.

There are also new and innovative ways to invest in commercial real estate. Among them is AKRUa platform that says you can safely and efficiently invest in premium fractional real estate assets for as little as $1,000.

Cincinnati-based AKRU reports that it combines proprietary blockchain technology with deep industry knowledge to enable investors to easily diversify their portfolios with improved control and liquidity.

CEO and Founder of AKRU Mohsin Masud told Cincinnati Future what he thinks makes his company unique. “One of the biggest differentiators between us and crowdfunding platforms is the fact that we don’t just do initial offerings. We provide a secondary market, which is essential as it will potentially allow investors to add liquidity to a more illiquid asset class. So now, not only can you buy real estate for $1,000, but you can also buy, sell, and trade after a holding period of about 90 days. This is a major discrepancy.

The company seeks to democratize investment opportunities with fewer steps and more access. You can read more about the benefits of investing in AKRU at www.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investment advice.

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