Cryptocurrency versus property as an investment for the future
As the digital world takes hold, the past ten years have seen a drastic rise in cryptocurrency as an investment.
With up to 10,000 variants of cryptocurrency, Bitcoin and other popular forms of 'internet money' have become extremely lucrative. While real estate has always been one of the most popular ways to build an asset portfolio, digital currency is now a serious contender as an investment opportunity for the future.
If you're weighing up the options between cryptocurrency and property as an investment, here are some things to consider.
Initial outlay
Cryptocurrency traditionally requires less initial outlay than real estate. You can invest at a price you can afford and build on the investment over time. To purchase property as an investment requires equity in an existing property and/or a stable financial position.
Tangible assets
When you purchase real estate as an investment, popular objectives are long-term rental, renovation to sell for a profit (otherwise known as 'flipping'), or short-term rentals through holiday sites such as Air BnB.
Regardless of goals, the property remains a tangible asset. You can release cash from a mortgage which can be used to increase the value of the property. Selling at the right time can make a property owner a healthy profit.
On the other hand, Cryptocurrencies aren't legal tender and aren't yet widely accepted. While you can take out equity from your property to purchase another property, we're not yet at the stage where you can do the same with cryptocurrency.
Fluctuations in the market
Both cryptocurrency and real estate markets fluctuate based on demand. The difference with real estate is that people are always going to need a home or shelter. Regardless of the price point or condition of the property, there will always be the potential to make money from real estate.
As we have seen recently, cryptocurrency is intangible. One simple change in the market could mean the end. Investors have little control over these external events that can lead to a significant loss.
Risk
Because cryptocurrency mining takes place online, it's an easy target for cyber-attacks and you could lose everything you've worked so hard to build with the click of a button. As such a new form of investment, we can only see the fluctuations in the market to a certain point with no evidence of the traditional cycle. There is clear evidence to suggest that regardless of the economic situation if the property market falls, it will always rise again.
Time to manage
While cryptocurrency is simple to mine and requires very little effort to see significant returns, the downside of an investment property is that it can be time-consuming and require effort to manage.
And that's where we come in!
To help property owners make the most of their investment, we manage all aspects of maintenance and repair. We find the most suitable tenants and ensure your property never sits empty. We have robust rental collection processes which mean cash flow will always be consistent.
While property requires a more significant initial outlay, with the right property management team, you can guarantee that despite fluctuations in the market, property is always going to be the safest, most secure and most lucrative investment into the future.
While cryptocurrency is a low initial investment, the risk is high. The opposite is true for real estate. To get onto the investment ladder may take a bit more time and effort but the rewards are both short and long term and can bring significant, tangible gains long into the future.
Ultimately, the investment that's right for you comes down to your own personal situation. To discuss how Manage Me Property Solutions can support you with your investment portfolio, contact us today.
