MELT Investment

Why Wealthy Investors Opt to Invest in Property?


It goes without saying that the pandemic has had an unprecedented and far-reaching effect on the economy. 2020 has been an extremely volatile year; however, as the economic crisis caused by the coronavirus outbreak continues, investors remain optimistic about investing, particularly in property.

Many investors have traditionally turned to the stock market as a place to put their money. However, while stocks are a well-known investment option, real estate offers superior advantages over investing in stocks. Under the right circumstances, property investment can be an alternative to stocks, offering lower risk, yielding better returns, and providing greater diversification.

In this article by Bloomberg, real estate remains the largest chunk of investment portfolios, at 27%. According to Sonnenfeldt, “Tiger members are trying to figure out what has changed forever in real estate, what has changed temporarily, and what will bounce back quickly.”

There’s an inherent demand for property investment. While the real estate market has gone up and down, it has never declined over time. The sheer number of new properties each year is a testament to the growing market. Supply follows demand, and demand is continuing to rise.

Another notable way to invest your money is through industrial real estate, which Sonnenfeldt shares “is on fire,” particularly in distribution centres that form the backbone of the internet delivery chain.

Industrial Real Estate can be broadly defined as all land and buildings which accommodate industrial activities, including production, manufacturing, assembly, warehousing, research, storage, and distribution. With retail giants and even boutique retailers moving a large part of their inventory via online sales, it is easy to see how the need for this kind of property is steadily increasing.