Grant Cardone asked his wife to sell his jet and condo ‘immediately’ if he dies — but told her to keep this 1 asset that will ‘take care’ of her, the kids, their church for ‘100s of years’

The enduring value of real estate

If you’re trying to preserve wealth for multiple generations, real estate is an asset class worth considering. Firstly, a piece of land can’t become obsolete in the same way a business can. In theory, that makes it a more durable asset class than stocks or bonds.

“That piece of real estate right there (...) will be in business longer than Facebook,” Cardone said referring to an apartment complex in his portfolio.

However, this asset also retains its value better over time. According to Chartered Financial Analyst Ben Carlson, U.S. real estate has delivered an average annual return of 4.2% from 1928-2023. Further analysis by Avison Young found that real estate investments tend to deliver positive real returns over longer time horizons of 10 years or more. In other words, property is a hedge against inflation.

These returns make sense intuitively. The cost of housing is a key element of the cost of living, so when incomes and inflation rise, rent and home prices do as well. This is why many investors add real estate to their portfolio for long-term financial objectives.

Unfortunately, the barriers to entry for this asset class have risen sharply in recent years. Home prices have surged 54% since 2019, according to the S&P CoreLogic Case-Shiller National Home Price Index. It’s fair to say buying property to add real estate to your portfolio isn’t as easy as it used to be. But, there are alternatives for investors looking to get their foot in the door.

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Getting started with real estate

If you don’t have enough saved for a down payment or can’t qualify for a mortgage, there are other ways to get real estate exposure.

Real estate investment trusts or REITs are, perhaps, the most popular option. REITs like Realty Income (NYSE:O), Crown Castle (NYSE:CCI) and Invitation Homes (NYSE:INVH) give you access to rental income from residential and commercial properties across the country.

You could even add niche real estate assets to your portfolio via REITs. Digital Realty Trust (NYSE:DLR) offers a portfolio of 300 data centers that are a key part of the artificial intelligence revolution, while Lamar Advertising (NASDAQ:LAMR) allows you to invest in outdoor advertising and billboards across the country.

These REITs are usually focused on the equity in properties which means you own a part of the real estate and rental income. However, you could also consider mortgage REITs like the iShares Mortgage Real Estate ETF which gives you exposure to the debt on properties and allows you to collect a portion of the property owner’s mortgage payments every month.

Regardless of which fund you choose, dedicating at least some of your portfolio to real estate assets and/or properties could bring you one step closer to lasting wealth.