Over the last few years, right up until the pandemic, many family offices around the world were investing in real estate assets due to their long-term cash flow potential. For example, The Real Deal’s 2020 study highlighted that the percentage of real estate investments made by American family offices went up from 12% in 2015 to 20% in 2020.
However, the pandemic sent the entire real estate market into pandemonium with both residential and commercial properties crashing in value. The volatility of the markets also coerced many family offices to shift their wealth generation strategies from long-term to short-term solutions, thereby shifting away from real estate assets. Now, as we emerge from the pandemic and with the global real estate market showing positive signs of recovery, it might be worth revisiting what makes it such a lucrative market to invest in and some of the ways to maximise profit in the same.
Benefits of investing in real estate
One of the key objectives of most family offices is long-term wealth generation. The tangible nature of real estate investments and the high probability of their appreciation automatically classify them as safe assets for investment. Here are some additional benefits real estate investments bring to the table:
