The Benefits of Investing in Private Real Estate

By Andrew John Cocks | Private Real Estate

The Benefits of Investing in Private Real Estate

Article by Bruce Garland

Despite of the market slowdown investing in real estate, particularly in private estate, is still an inviting form of investment. In this article, you will be informed of the benefits we can get in estate investments.

Generally, private estate is the least tied and even negatively connected with stocks, bonds, and real estate investment trusts. The situation helps a lot by keeping the fluctuations in returns within the portfolio to a minimum for investors.

The low connection to other asset classes is a strong indication that returns in private estate like for example in Boston luxury apartments are not strongly correlated with bonds, equities and public REITs.

The observation is true for quite some time because private estate shows a correlation of -0.03 and +0.25. This low correlation is also observed in the past decade even with the global economic crisis that is currently still going on.

In addition, the valuation method that private estate is using also causes the low correlation. The valuation method that private estate is using is the appraisal-based valuation. When it comes to short-term market volatility, the method used is less sensitive compared to the stock market valuation used in publicly traded REITs.

One must note though that every investment in private estate is unique, from its location to the size to its characteristics, value and more. Therefore, if you are investing for Boston luxury rentals catering to private estate companies, your investment will have the tendency to grow geographically as development increases in the surrounding area and more housing units are being built up.

On the other hands, if you are still in doubt, you must then be informed that in the past 10 and 15 years, private real estate return or income has surpassed the S&P 500, Dow Jones, Russell 2000, and Barclays Capital.

The relatively low volatility that private real estate has shown means that it is providing higher returns than stocks as well as public real estate.

With this information being told, this can lead to many potential investors to go for investing in private real estate. In Boston, where house rental is high, real estate investors are more likely to take the risk of investing one or more unit particularly in those known Fenway apartments. We all know that Fenway is one of the best places to stay when in Boston, as it is close to various establishments and the Fenway Park as well. However, investment in residential real estate is not without risks, no matter what market it is in. Therefore, potential investors are encouraged to do their due diligence and research and properties they are considering to buy thoroughly before taking any other action.

Written by Bruce Garland a Boston native and baseball enthusiast. Bruce wants to help you get the best Boston luxury apartments, Fenway Apartments, and luxury apartment in Boston that you can through Fenway.

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