For the last few weeks, the stock market has been going down, down and down. Just when investors thought it couldn’t get any worse, it did. Crypto isn’t escaping the dance either, going down almost 50% since November 2021. For many, it’s just emotionally draining to follow their portfolio through this rollercoaster. So what's the alternative then? Real estate!
With BRXS, you can select a property in Amsterdam you like, invest in minutes and earn through rental income and property appreciation, avoiding all the burdens. It’s a more stable and consistent investment that allows you to diversify your investment portfolio.
Let’s take a look at some of the advantages that real estate investing can provide:
Real-estate investing offers two different streams of return:
Consistent and stable cash flow
Real estate provides a stable income as you receive rent from the tenants in your properties. While there is a risk of vacancy, rental income from a valuable property tends to be very predictable and consistent: the same amount every single month or quarter arrives in your bank account. That is why real estate is often used by investors to build their passive income, ie. an extra income stream outside of their employment or professional activities, and contribute to achieving their financial independence.
Real estate has historically shown a very strong and steady increase in value over the long-term. Looking at the period of 1995 to 2020 in Amsterdam, the value has increased at an average of 7.1% per year*. While even taking into account that there have been two dips in value in the periods of 2002-2004 and 2008-2013. And although we can never predict the future, these trends are expected to continue in the foreseeable future with the large Dutch banks forecasting another big increase in 2022: Rabobank: 11.5%, Abn Amro: 12.5%, ING: 9.9%
Source: CBS / KADASTER
The most important lesson in investing is to not put all your eggs in one basket. Investing will always bring risk so if one basket is down, your other baskets might save your portfolio from getting hit too hard. This is especially true for private real estate due to its historical low correlation with the stock markets. Which means that stocks and real estate don’t necessarily go up and down together in the same period*.
If you’ve invested in crypto, you’re most probably well aware of what volatility is. While prices of certain coins can go up double digits some days, they can also significantly go down other days (especially if Elon Musk is tweeting). And while stocks tend to be less volatile than crypto, they can still bounce up and down very frequently. Real estate on the other hand has historically shown lower volatility and can bring some more stability and steady returns to your portfolio.
Hedge against inflation
Of all asset classes, real-estate is the most closely correlated with inflation. When prices go up, not only residential real estate valuations tend to go up, but also rents tend to increase as most rental contracts have a clause. This allows yearly rent increases to follow inflation, providing you a potential hedge and protection against inflation.
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Still have a few questions? Schedule a call to chat with us in Dutch or English, email us at email@example.com or read our FAQ page for more information on the ins-and-outs of BRXS.
* The rate of return on everything