At Dickinson Investment Advisors, we create plans to meet people’s goals. We fill our client’s portfolios often with stocks and bonds, which have unique advantages to the portfolio. But there’s a problem with those at times.
When you put those in the portfolio, there’s moments in history where there’s huge volatility like we just experienced here in February and March. Stocks trade on the day to day factors and what’s going on around the world, which affect stock prices.
That’s why we like real estate investments. Real estate is based on cash flow which tends to be very steady. Investors pick up a steady income. Quarterly or monthly, there’s this check that just keeps coming.
Another great reason to invest in real estate is growth it can provide; we actually can magnify that. So, for every dollar we put in, we might have four dollars working for us because we’re using borrowed funds from the bank, leveraging our potential.
So, in general, real estate might be slower than stocks, but when you lever up, it can be very attractive as well.
Another feature that my clients really enjoy is the tax benefits that come with it, the cash flow you’re putting into the pocket. And some of those capital gains that you might get from time to time is sheltered by something called depreciation, which basically defers your income taxes to some later date.
We have stability, steady income, growth opportunities and tax advantages. Then finally, there’s an innate enjoyment people have from being able to go out, look at a property, touch it, feel it and know that it’s there. Sometimes when you buy a stock, it’s a piece of paper. When things start going haywire with the stock market, you’re just uncertain about this piece of paper. But with real estate, I know it’s out there and doing well for me.
For nearly a century, Metonic has focused on uncovering and creating value while providing a long-term perspective for those who invest alongside us.