According to a study carried out by a team of economists from the University of California, they found the answer to this question by analyzing large amounts of information from a period of 145 years.
Best Money Making Investments: The Numbers
The study authors reported that they analyzed the progress of 16 economies over the past 145 years to find which one offers the best return on investment. They compared the returns of various asset classes, including stocks, residential real estate.
For a better analysis, the researchers adjusted for inflation and included all returns, not just appreciation. Dividend income was included for shares and rental income for residential properties.
Bottom line: Residential real estate was the best investment, averaging more than seven per cent per year. The shares were not far behind, just shy of seven per cent.
Real Estate vs. Stocks: Average ROI
Rental income proved to be a major factor: About half of the returns on real estate investments came from rental income, while the other half came from appreciation.
Investments in stocks and investment properties performed differently in various countries, of course. Here is a comparison of each of the 16 countries:
We must bear in mind that these are long-term performance averages over many decades.
One of the most interesting factors for real estate investment lies in its risk-reward ratio.
Rental Properties: Low Risk, High Yield
Throughout modern history, residential real estate investors can boast the best return on investment, thanks to its extremely high rate of return with low risk.
We are talking about impressive stability here, but what is the big problem with real estate investments?
Global real estate is around $ 228 trillion and only 7% of this is available to retail investors. Only 3% of the world's population has invested in real estate, but more than 80% consider real estate to be a good investment. Efficient trading in real estate assets does not exist today and increased liquidity could potentially augment the existing market with a liquidity premium of 20-25%.
But how to achieve this liquidity?
With tokenization, tokenization means the digitization of an asset through the blockchain. Any asset with real-world value, such as real estate, land, art, and trademarks, can be converted to a digital representation (token). Therefore, legally speaking, these assets are securities.
Tokenization levels the playing field, allowing even those of us with less capital to take advantage of the concept of fractional ownership to own a piece of an expensive asset, be it a condo, vehicle, business, or work of art. The impact of tokenization is broad and applies to almost anything of value.
At MountX we have created a proven system for the creation of wealth, based on knowledge, action and access to financial technologies so that you can achieve your goals, taking advantage of Real Estate Investment.
We are pioneers in the tokenization of real estate assets on Blockchain in Latin America.
MountX, is a fractional ownership investment platform that helps millennials who want to invest to participate in exclusive real estate projects at affordable prices, with a safe and proven system within an international community.
This accessibility, never seen before, will open a new era in the region to generate wealth through real estate investments safely, closing the inequality gap. Opening not only local markets but the global real estate market. Empowering people to invest in the best opportunities the world has to offer without the limitations of where they live.
We invite you to schedule a consultation with us so that you can clarify all your doubts.