Skip to main content

Real Estate as a Store of Value


Visit Our Website

Store of value is a function of an asset that can be saved, retrieved and exchanged at a later time without any risk of losing it and also retains its purchasing power into the future. Wealth is the total of all stores of value monetary and non-monetary assets.

The most common store of value in modern viewpoint has been currency, precious metal (Gold, silver etc.) and real estate. The underlying reason for using this storing medium is that it has a better way of managing the risk associated with it. Most people would say money is one of the best ways to store value because of the ease of exchanging it for other goods and services without time wastage, but it can quickly be affected by hyperinflation mostly in developing world.
However, real estate is a better means of storing value for investors if the property is strategically located in choice areas, well-built (architecturally and structurally) and free from any form of disaster. A good house will gain value with inflation as well as provide passive income for the owner for the number of years it was kept as rental property. What this means is that the day it is sold off the proceeds will have the same or more purchasing power than it possess years back when it was used for buying the property. The passive income generated less maintenance over the years would have served as interest or dividend for the investor. On the other hand if the money is kept in a conservative investment (Treasury bill, note or bond), it will just be barely keeping up with inflation with all the interest added.

The main setback real estate has as a store of value is the time spent looking for a buyer. This is the reason while it is very important to buy properties at choice area where the demand is or will be very high in the nearest future. Properties located in choice area have been known not to decline in value even during financial crunch. Precious metals will likely not be affected by any risk of devaluation because they are rare and have high demand.

Real estate and Precious metal like gold are very good investment when the other form of investment becomes too risky and unstable. The difference between them is that real estate is an income generator while still keeping up with inflation the same way gold keeps up with inflation. The down side of gold as an investment is the ability to store it away safely.

So where would you rather keep your money and have peace of mind either to grow your wealth or to have it available to you in the future when the need arises for liquidity?

 The Relevance of a High Oversite Concrete/Foundation of a House
 What I Wish I Knew Before Investing In Rental Properties
 Pros and Cons of Renovating a House

Disclaimer
Any views or opinions represented in this blog belong solely to the blog writer/owner and do not represent those of people, institutions or organizations that the writer/owner may or may not be associated with in professional or personal capacity, unless explicitly stated.
Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual. All content provided on this blog is for informational purposes only. The writer/owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.
The writer/owner will not be liable for any errors or omissions in this information nor for the availability of this information. The writer/owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Comments are welcome. However, the blog writer/owner reserves the right to edit or delete any comments submitted to this blog without notice due to:
- Comments deemed to be spam or questionable spam.
- Comments including profanity.
- Comments containing language or concepts that could be deemed offensive.
- Comments containing hate speech, credible threats, or direct attacks on an individual or group.
The blog owner is not responsible for the content in comments.
This blog disclaimer is subject to change at any time.
Labels:

Comments

  1. UnknownJuly 16, 2019 at 7:50 AM

    These are good things to know.

    ReplyDelete
  2. UnknownJuly 16, 2019 at 7:54 AM

    Before this, I thought the bank was the best place.

    ReplyDelete
  3. Alen j. WilliumNovember 6, 2020 at 11:32 PM

    Very helpful I found this blog..Thanks
    We buy houses kansas city.

    ReplyDelete
  4. UnknownJanuary 14, 2021 at 5:52 AM

    I am impressed. I don't think Ive met anyone who knows as much about this subject as you do. You are truly well informed and very intelligent. You wrote something that people could understand and made the subject intriguing for everyone. Really, great blog you have got here. Pittsburgh wholesale real estate company,

    ReplyDelete
  5. UnknownJanuary 27, 2021 at 12:15 AM

    Wow, cool post. I'd like to write like this too - taking time and real hard work to make a great article... but I put things off too much and never seem to get started. Thanks though. sell a home in florida

    ReplyDelete
  6. michelJanuary 29, 2021 at 5:21 AM

    clarity on this important subject can be easily observed...
    condo for sale

    ReplyDelete
  7. AnonymousFebruary 14, 2021 at 1:02 AM

    US property, I would like to say that this blog really convinced me to do it! Thanks, very good post.

    ReplyDelete
  8. HarisFebruary 21, 2021 at 6:41 AM

    I admire this article for the well-researched content and excellent wording. I got so involved in this material that I couldn’t stop reading. I am impressed with your work and skill. Thank you so much. real estate forms ontario

    ReplyDelete

Post a Comment

Other interesting posts

Merits and Demerits of Building a House from Scratch

Visit Our Website Building a house from scratch for rental purposes or outright sale has its merits and demerits as compared to renovating an existing building.    Merits You can have an input on the architectural design of the house. You can decide how the external view and the interior of the house should look like. Creating an area with good and easy to move around living space can make the apartment appealing to tenants. You can decide the budget for the project. Based on your estimated selling price for the proposed property, you can decide on the budget you want to put into the investment to give you a reasonable profit margin. You can decide the number of bedrooms for each apartment. Most times with a good survey of the vicinity you will be able to tell what kind of apartment will rent faster and give higher returns. Example the difference between 1-bedroom apartment and 2- bedroom apartment or 2- bedroom apartment and 3- bedroom apartment may not be ...
5 comments
Read more

A Landlord’s Checklist: What to Know Before Renting Out Your Property

  Visit Our Website  Renting out a property is not just a financial decision—it is a powerful way to build wealth, create passive income, and establish long-term security for yourself and your family. Whether you are leveraging a second home, downsizing, or exploring real estate investing, becoming a landlord opens the door to new opportunities. While it may seem daunting at first, with the right preparation and smart strategies, you can protect your investment, maximize your returns, and enjoy the benefits of owning real estate. The following steps will help you build a successful and rewarding rental experience. 1. Understand Your Legal Responsibilities As a landlord, you are subject to local, state, and federal laws that govern the rental process. These include rules related to fair housing, tenant rights, eviction procedures, security deposits, habitability standards, and other relevant matters. Familiarize yourself with the Fair Housing Act to avoid discriminatory practic...
Post a Comment
Read more

Difference Between Cost, Expense, Liabilities, Asset, Income and Equity

     Visit Our Website  Asset, equity, income, cost, expenses, and liability in this write-up will be viewed from a real estate investor's standpoint. They are interrelated and it will be good for investors to have a clearer understanding of these words. An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. An asset can also be something you own containing economic value right now and/or future value . So, we can simply define an asset as anything of value that can be converted into cash. Assets are tangible and intangible. Tangible assets include current assets (cash, inventory, and accounts receivables) and fixed assets (Buildings, land, cars, and equipment). On the other hand, intangible assets include copyrights, trademarks, patents, etc. All investments are assets but not all assets are investments. An investment yields income or profit but not all asse...
Post a Comment
Read more

It Is Better To Renovate Before Renting Out After Tenants Vacate A House

  Visit Our Website  Rental apartments or houses are left in a state of disrepair most of the time by the tenants when they move out, these make the house look dilapidated and low-valued. A conscious effort needs to be put in place by the management company/landlord to ensure constant repairs are carried out by both the tenant and landlord as stated in the tenancy agreement. These repairs should include plumbing, wardrobes/cabinets, electrical fixtures, doors, and keys, etc. The management company/landlord should visit the tenant periodically as stated in the agreement (could be quarterly, bi-annually, or yearly). This will ensure that the house is not dilapidated. A dilapidated rental needs a lot more money to renovate the apartment or house when the tenant moves out. In an ideal situation, the landlord will have to put things right each time a tenant packs out before letting the house out to the next occupant. Most times renovating your house before renting them out helps b...
Post a Comment
Read more

The Relevance of a High Oversite Concrete/Foundation of a House

Visit Our Website Oversite concrete (often referred to as German floor by the laymen) is a layer of concrete used to seal the earth under the ground floor of a house. Before pegging and digging the foundation of the proposed building. The first thing is to determine how high the oversite concrete of the house should be raised above the natural ground level. Note that there will be many different levels on a sloped land. It is very important to check the topography of the area. More important is the level of the land with respect to the road. If the road is tarred, use it as a reference for determining how high to fill the land when the building is completed for proper grading of the yard for surface drainage. But if the road is not tarred, endeavor to put into consideration how high in the future you think the road will be filled or excavated during construction and use that as a guide or reference. Having a good knowledge of how high the land should be filled to ena...
Post a Comment
Read more

Tenants Obligations To Their Landlords

   Visit Our Website  Tenant responsibility refers to the obligations and duties that individuals renting a property are expected to uphold during their tenancy. These responsibilities are typically outlined in the lease agreement signed between the tenant and the landlord or property management company. While specific requirements may vary depending on local laws and the terms of the lease, there are several common responsibilities that tenants are generally expected to  carryout.   Prompt Rent Payment:   Perhaps the most fundamental tenant responsibility is to pay rent in full and on time. This includes adhering to the agreed-upon payment schedule and making payments in the manner specified in the lease agreement, whether it be through direct deposit, check, or another method .   Property Care and Maintenance:   Tenants are typically responsible for maintaining the rental property in a clean and sanitary condition. This may involve tasks such as...
Post a Comment
Read more

Understanding Financial Independence and Real Estate

Visit Our Website Let’s quickly look at some ways of defining and actualizing financial independence; financial independence by net worth and financial independence by cash flow. Financial independence by net worth: Refers to the net worth of all your investable assets (excluding your assets that do not generate income like your primary residence, furniture, cars etc.)   divided by your annual expenses. Financial Freedom Ratio = investable asset/annual expense   For me this value should be greater than 40 to be financially free. This then means you can withdraw a fixed 2.5% from your asset annually (by liquidity) and your portfolio will last the rest of your life time. This will work better if you are 40 years and above. Remember that liability from children upkeep and education costs tends to decrease as you grow older, however, liabilities due to need for health-care or long term living assistance care can increase. Financial independence by passive in...
1 comment
Read more