A very good distinction between real estate and some cryptocurrencies like Bitcoin is that the former is a physical asset while the latter is a digital asset. However, when it comes to investing, you invest in the two asset classes the same way. Let me explain further below:
Capital gains: Here you buy any of these assets at a low price and sell at a higher price, i.e buy low and sell high. This can be very profitable if we don’t have a market crash because, over time, prices of real estate tend to go up.
Cash flow: Here you don’t intend to sell the asset. You just buy so you can continuously generate passive income via renting or lending the asset out. For instance, you charge monthly or yearly rent for giving your house out to a tenant, and you charge hourly interest for lending your crypto out to borrowers. This type of income is good if you have a long-term mindset.
Note: You can do both types of investing. You can buy now, collect rent for a while (cash flow), then sell it later on after the value of the asset has appreciated(capital gains).
One additional tip I will like to give you is that in crypto, you make more money buying an asset early when the price is cheap. This can be directly from the project team/founder using a decentralized exchange like Uniswap or Bakery swap, or buying before it gets listed on a major exchange like Binance.
If I’m to relate the above explanation to real estate, I will say that you can make more profit by buying land directly from family members. However, you will need a trusted agent/broker to take you to them or buy distressed properties from lawyers who have motivated sellers.
A motivated seller needs cash to settle a financial problem as soon as possible and wouldn’t mind selling his or her asset below market value. Funny enough, I love this type of sellers.
I hope you have learn something new. Feel free to fill our interest form and kickstart your real estate investment journey with us.