Here's the downside:
-Real estate can be compulsorily acquired by the Government.
In my 40+ years of owning real estate (both individual property and family owned), I've never had the government claim eminent domain and take part in condemnation of my land/property. Even in the off chance that they ever did, they practically always provide the real estate owner with fair value compensation.
-It is not immovable and cannot be transferred across boarders.
True. Then again, for someone like me, the USA is where I plan to stay for the rest of my life.
-Huge friction in transaction costs (both to buy and sell).
If you're looking to liquidate your assets in a bind, that can be detrimental as time could be of the essence. For me, I am a long term HODL'er of real estate.
-Maintenance costs ongoing.
Depends on what type of real estate you own and via what medium. I own everything from land (no real maintenance costs), indwelling units (condos & houses) and shares via REITs. Condos and houses have maintenance costs, but they are also costs I can write off against my taxes, thereby lowering my tax burden.
-Requires ongoing effort if renting it to earn a yield.
Depends on what you own and where you rent. If you own in a city that has high demand and rents are typically high, then getting and keeping tenants can be very simple. Additionally, if you don't like taking part in any "ongoing effort", get yourself a property manager (recommended if you own more than 5 properties at least).
-Can be heavily taxed (both on acquisition, on an ongoing basis, and massively via capital gains tax on any sale).
On acquisition, you can typically share the tax burden between the seller/buyer (makes it easier to stomach). Ongoing property taxes is a way of life, if you earn income in this country you HAVE to pay taxes one way or another (I find ways to lower tax burden). I don't agree with the notion that you have to pay capital gains on any sale to the tune of a "massive amount". This isn't true. As an accountant, I can tell you that if you were to sell a property, I can offset every last cost of repair, most of your interests paid during holding of that asset, cost of your realtor fee and closing costs for your entire transaction. I can easily turn that 15-20% to a measly 7-9% and MOST accountants can.
-For most people is leveraged, and value is thus highly influenced via interest rates. (This can be both a positive of a negative).
This last year and a half, mortgages have been given out for practically nothing. Interest rates have been at an all time low. It's free money they're lending out. Great time to be leveraged over the last 1.5 years.
-Virtually unlimited supply can be produced in most countries, unless a very small place like HK or Singapore or Monaco (via more apartments that can be built upwards on plots of land).
Unless God is creating more land or the oceans are receding and revealing more earth to build upon, not sure I can agree with the virtually unlimited supply.
Still, I would argue highly that when comparing apples to oranges, real estate is still an exponentially better hedge against inflation than Bitcoin.
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