What is Store of Value?
Store of value is an economic term used to describe an asset that maintains its purchasing power over time. In other words, a store of value is an asset that can be saved, invested, and retrieved in the future to be used to purchase goods and services of roughly the same value as when it was saved.
Commercial real estate is considered a store of value for several reasons. Firstly, commercial real estate often generates income through rent, making it a potential source of passive income for investors. Secondly, the value of commercial real estate is likely to appreciate over time as the demand for multifamily increases, making it a potential source of capital appreciation. Thirdly, commercial real estate is a tangible asset, providing a sense of stability and security for investors. Finally, commercial real estate is a relatively stable asset that is less prone to market volatility compared to other types of investments, making it a reliable store of value.
The combination of income generation, potential for capital appreciation, tangibility, and stability make commercial real estate an attractive store of value for investors looking to preserve their wealth over the long-term.
Let's Nerd Out
As a seasoned electrical engineer and real estate investor, I have seen firsthand the power of multifamily real estate as a store of value. Over the years, I have invested in a variety of real estate assets, including single-family homes, commercial properties, and multifamily properties. In my experience, multifamily real estate has proven to be one of the most powerful stores of value and a great investment opportunity for those looking to build wealth over the long-term.
One of the main reasons why multifamily real estate is such a powerful store of value is its ability to generate consistent cash flow. Unlike other types of real estate assets, multifamily properties generate a steady stream of income through rental income. This is because multifamily properties typically have multiple tenants, which means that even if one unit is vacant, the property is still generating income from the other units. This helps to mitigate the risk associated with real estate investment and provides a stable source of income for investors.
Another reason why multifamily real estate is such a powerful store of value is its ability to appreciate in value over time. As the population continues to grow and demand for housing increases, the value of multifamily properties is likely to increase. Additionally, as the economy improves and people's financial situations become more stable, the demand for rental properties is likely to increase, which will drive up the value of multifamily properties.
In addition to its ability to generate consistent cash flow and appreciate in value over time, multifamily real estate also offers a number of other benefits. For example, multifamily properties are often easier to manage than other types of real estate assets. This is because multifamily properties typically have on-site property managers who are responsible for managing the day-to-day operations of the property, including maintenance, repairs, and tenant relations. This makes multifamily properties a great option for those who are looking to invest in real estate but don't have the time or expertise to manage their own properties.
Another advantage of multifamily real estate is that it provides a hedge against inflation. As the cost of living increases, rental prices are likely to increase as well. This means that multifamily properties can provide a stable source of income even as the cost of living increases. Additionally, as the value of the property increases, the value of the investment increases as well, providing a hedge against inflation.
Finally, multifamily real estate is a great investment opportunity for those looking to build wealth over the long-term. Unlike other types of investments, such as stocks and bonds, real estate assets are tangible and provide a sense of stability and security. Additionally, as the value of the property increases over time, the value of the investment increases as well, which can help to grow wealth over the long-term.
To wrap this up, by definition, Store of Value is "a store of value is an asset that can be saved, invested, and retrieved in the future to be used to purchase goods and services of roughly the same value as when it was saved." Multifamily real estate is a powerful store of value because historically it is the most recession resilient asset class as well as one of the few that will actually increase in value as your investment is stored.
Multifamily is a great investment opportunity for those looking to build wealth over the long-term. With its ability to generate consistent cash flow, appreciate in value over time, and provide a hedge against inflation, multifamily real estate is a great option for those looking to invest outside of Wall Street. If you're looking to invest in Main Street, I encourage you to consider multifamily syndications as a powerful store of value and a great investment opportunity.
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