Is real estate the best asset class for 2023?

What is an asset class?

An asset class is defined as a collection of investments which share similar characteristics. These investment types behave similarly in the marketplace. They can be broken down into two types: traditional and alternative. Real estate asset is considered an alternative investment, while investments like equities and cash equivalents are considered traditional investments.

What are the 4 pillars of real estate investing?

While there are no shortcuts to becoming a successful real estate investor, there are certain areas you can focus your attention on to make the most of property investments in 2023. The four pillars of real estate investing are:

• Education: While real estate can be a simple business at times, it can just as easily become complex overnight, depending on your investment style. Like all business types, it is important that you need to know everything you can about the industry. Education is key to getting ahead.
• Deals: Purchasing an investment property is markedly different from purchasing a home to live in. One mistake new investors make is that they look for great homes instead of searching for a deal that represents a great return on investment, such as a “fixer-upper” in an up-and-coming area with high rental yields.

• Planning: As an investor, each action you take should have a purpose. Don’t be afraid to ask questions or do extensive research into an area prior to investing. Not only will you need a plan, but you’ll also need a contingency plan if things don’t go as expected. Always be prepared, and plan ahead to achieve this.
• Action: That said, all the planning in the world won’t make a difference unless you make good on it. Taking action shouldn’t be reckless, but you should be prepared to strike while the iron is hot if you spot a good deal.

What are the 3 most important factors in real estate?

Location, circumstances and timing are the three most important factors in real estate. Location will determine the desirability for renters to live in a certain area, circumstances will dictate whether a property is a viable investment, and timing will depend on whether you can realistically afford to invest at a certain time. While location is key, timing and circumstances (for example, an economic boom and an increased rental demand) all impact the viability of an investment.

Is real estate the best asset class?

Real estate is the reliable asset class for 2023 because tangible assets are usually more stable than financial assets. This means you will be more likely to enjoy a steady profit from property. Property is also the asset class where it's easiest for a typical investor to borrow against the asset, increasing your leverage and potential returns.

However, you won’t be able to free up any funds tied into the investment as quickly as you might with shares or other traditional asset classes. During times of economic downturn, many investors look to property for the stability it offers.

Why is real estate an attractive asset class?

Throughout modern history, there have been very few investment types available that offer the potential to generate such significant returns on investment as real estate. Property, therefore, stands out as an attractive investment proposition for investors of all types and experience levels.