3 Reasons Real Estate Funds Should Be Your Option During This Economic Downturn

Economic downturns can be a scary time for investors. The stock market can be volatile, and other assets, such as bonds, may not offer the returns that investors are looking for. However, there is one asset class that has historically performed well during economic downturns which is real estate.

Real estate is a tangible asset that provides shelter, which is a basic human need. This means that even during economic downturns, there is still demand for real estate. Additionally, real estate can provide a steady stream of income from rent payments.

One way to invest in real estate during an economic downturn is through real estate funds. Real estate funds are investment vehicles that pool money from investors to purchase and manage a portfolio of real estate properties. This can be a good option for investors who do not have the time or expertise to manage their own real estate investments.

Here are three reasons why real estate funds should be your option during this economic downturn:

? 1. Real estate is a hedge against inflation.

Inflation causes the prices for goods and services to increase over time. When inflation is high, the value of money decreases. However, real estate has historically appreciated in value over time, even during periods of high inflation. This is because real estate is a tangible asset that provides shelter, which is a basic human need.

? 2. Real estate funds can provide a steady stream of income.

Real estate funds typically invest in a portfolio of income-producing properties such as apartment buildings, office buildings, retail centers, hospitality, and other real estate assets. This can provide investors with a steady stream of income from rent payments. This income can be especially valuable during economic downturns, when other sources of income may adversely suffer.

? 3. Real estate funds can be diversified across different property types and geographies.

Real estate funds can invest in a variety of different property types, such as office, retail, industrial, and multifamily. This diversification can help to reduce risk. For example, if the office property sector is underperforming, the fund's investments in retail and industrial properties may be able to offset some of the losses. Additionally, real estate funds can invest in properties across different geographies. This can further reduce risk by diversifying away from any one particular market.

In addition to the three reasons listed above, there are a few other benefits to investing in real estate funds during an economic downturn, especially for funds that have exposure to international markets for reasons like:

1. Lower property prices: During an economic downturn, property prices may be lower than they would be during a period of economic growth. This can make it a good time to buy real estate, especially if you are investing for the long term.
2. Fewer buyers: During an economic downturn, there may be fewer buyers competing for properties. This can give you more negotiating power when you are buying real estate.
3. Tax benefits: Real estate investments can offer a number of tax benefits, such as depreciation and capital gains tax deferral. These tax benefits can be especially valuable during an economic downturn, when other sources of income may be down.

Here are some additional tips for investing in real estate funds during an economic downturn:

?●???? Invest for the long term. Real estate is a long-term investment. You should be investing in real estate funds for medium to long term to see good returns.

?●???? Choose a fund with a good track record. When choosing a real estate fund, it is important to look at the fund's track record. This will give you an idea of how the fund has performed in the past.

?●???? Invest in a diversified fund. As mentioned above, it is important to invest in a real estate fund that is diversified across different property types and geographies. This will help to reduce your risk.

By following these tips, you can increase your chances of success when investing in real estate funds during an economic downturn. Contact us if you have any further questions about how to choose the right real estate fund that is suitable for you.

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice.

Written by: Hasnae Taleb