August 15, 2022

Reasons real estate should be a part of your investment portfolio

Whether you are just starting your first 401k or already have an impressive array of stocks, diversifying your portfolio as you save for retirement should not be underestimated. If you own a home, you’ve already taken a step towards diversification, but everyone should be thinking about how they can invest in real estate.


Real estate offers advantages to investors and creates opportunities that the stock market simply cannot compete with.

Here are 4 reasons why real estate should be part of your investment portfolio, plus one easy way to get started today:

1.      Leverage

Real estate is unlike any other asset in that an investor can safely control a large portfolio with very little money of their own. Most rental properties require only 20% or less down. That means that an investor with only $200,000 can control a million dollar portfolio and take advantage of the appreciation of an asset they do not fully own. With the way real estate has historically appreciated, that can potentially provide enough income to sustain a modest lifestyle indefinitely.

2.     Always in Demand

People always need places to live, in good times and bad, so housing is always in demand. Property values can and do go down occasionally, but to a much lesser degree than most stocks. Real estate investment can be the perfect hedge for the ups and downs of the market while still providing solid growth.

3.     Tax Advantages

Taxes are one of the biggest expenses we must pay but deducting mortgage interest and depreciation on rental properties can be a huge asset in lowering your tax burden. Sometimes depreciation can even be pulled forward with a cost segregation study. This allows some aspects of the property to be deducted immediately as opposed to over a 27.5-year period. The more you save on taxes, the more you can invest in other things.

4.     The Power of Diversification

Every portfolio can be strengthened by diversification. The stock market ebbs and flows, but real estate is typically much more stable. You can even diversify within real estate investments by owning a home, adding one or more rental properties, and investing in a Real Estate Investment Trust (REIT).

Anyone who wants to get ahead, create monthly cash flow, and drastically increase the resilience of their retirement portfolio should prioritize adding real estate investments.

Cityfunds provide real estate investment benefits without the hassle.

To get involved in real estate and start diversifying your portfolio today, consider investing with Cityfunds from Nada. For as little as $250 Cityfunds make it possible to invest in a single city’s residential real estate market, unlocking access to high-demand and supply-constrained markets like Austin, Miami, and Dallas. They also offer a way to invest in residential real estate without the time and financial commitment of running a business or purchasing an entire property.

There are so many solid reasons to invest in real estate and Cityfunds make it easier than ever, so what are you waiting for? Go to nada.co/cityfunds today to learn more.

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