Is Real Estate a Better Investment than Bitcoin? [Real Estate Training] (2024)

A five-year analytical study indicates that owning cryptocurrency offers a bigger return on investment than owning land, commercial property, or a single-family home.

Real Estate Ownership Long Considered a Fundamental Component of Growing Financial Wealth

Investment in real estate, whether that real estate is a single-family home, land and/or commercial property has long been the path towards achieving financial wealth and security. In other terms, owning your own single-family home has long been considered to be the American Dream.

Unfortunately, in today’s world, homeownership is no longer considered to be the “be all, end all.” According to Apartment List’s 2021 Millennial Homeownership Report, nearly 1 in 5 Millennials have given up on homeownership altogether. 18.2% of non-home owning Millennials in 2020 indicated that they expected to always rent, up from 12.3% in 2019 and 10.7% in 2018.

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Why? Rob Warnock, research associate with ApartmentList, said, “…affordability remains the biggest roadblock to prospective Millennial homebuyers.” These nearly 20% of Millennials simply cannot the upfront cost of a down payment.

And if they could afford a down payment on a single-family home, how would ROI on the home compare to the ROI on Bitcoin?

Comparative Returns on Investments for Single-Family Home & Bitcoin

A recently released five-year analytic study by Point2Homes.com compared the returns on equal investments in a median-priced home in the largest 100 US cities based on 2017 prices and a 20% down payment against Bitcoin then priced at $964.

In 2017, the median-price of a home in San Francisco was $1,252,543. A 20% down payment, or initial investment, would have been $250,509. That initial investment of $250,509 would have bought 260 B.

Today, the median price of a single-family home in San Francisco is now up +222%, a gain of $270,280. If you had instead bought Bitcoinwith that initial investment, or down payment, of $250,509 or the equivalent in Bitcoin of 260B, you would have realized a return on investment of $18.08M.

For a more “normal” priced single-family home in Columbus OH, the 2017 home would have required a down payment of $27,738. That $27,738 would have bought 29B in 2017. Today, your 29B would be worth $1.78M and your single-family home ROI would be around $76,000.

The same is true in Laredo TX…$12,000 ROI on single-family home and ROI on Bitcoin is $2M. Norfolk VA? $57,000 vs $2.5M.

Real Estate Never Intended to Generate Overnight Wealth

Historically, real estate has been expected to beat the rate of inflation via gradual price appreciation. The goal, slow and steady just like the turtle wining the race against the hare, was to buy a house to escape rental price increases, hang on to the house with a cost-certain, fixed-rate mortgage, enhance the home’s value with remodels/additions/landscaping, pay off the mortgage, use the home equity/home sale to retire in a warm climate.

Cryptocurrency Still Niche Currency and a Volatile One At That

Bitcoin, Ethereum, Dogecoin, we could go on and on here because blockchain currency has been around for a long time now, are names most of us are only becoming familiar with. Two of the things that immediately pop into our heads when we hear these names are wealth and volatility.

Yet the more “vendors” such as the second-home investment platform Pacaso and real estate single-family home sellers accept cryptocurrency as payment, the more familiar we’ll all become with blockchain-backed funds. According to Inman, “it’s not far off from becoming ‘common’ in more and more transactions.

And it’s also not far off that some of that volatility associated with cryptocurrencies will be lessened. Many arms of the federal government are currently looking into how cryptocurrencies are being used, how much wealth they’re generating for which people, and how to place protective restrictions on the blockchain-backed funds.

Still, for right now, research from Point2Homes indicates that cryptocurrencies are better wealth generators than real estate. Perhaps owning cryptocurrencies will be the hallmark of a revised American Dream?

Thanks to Point2Homes, ApartmentList and Inman.

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Is Real Estate a Better Investment than Bitcoin? [Real Estate Training] (2024)

FAQs

Is Real Estate a Better Investment than Bitcoin? [Real Estate Training]? ›

Real estate is a more stable and predictable option that offers a number of tax benefits, while cryptocurrencies offer the potential for high returns but also come with significant risk.

Is it better to invest in real estate or bitcoin? ›

But compared to the high risk of crypto investing, the real estate market seems like an especially safe haven for growing your wealth. With crypto, your only gains come from price fluctuations. You need to sell your asset to realize any income.

What is better than real estate investing? ›

Stocks are highly liquid. While investment cash can be locked up for years in real estate, the purchase or sale of public company shares can be done the moment you decide it's time to act. Unlike real estate, it's also easier to know the value of your investment at any time.

What type of real estate investment makes the most money? ›

5 Most Profitable Real Estate Ventures
  1. Residential Real Estate Development. ...
  2. Commercial Real Estate Investment. ...
  3. Real Estate Crowdfunding. ...
  4. Real Estate Technology ( PropTech) ...
  5. Short-Term Rentals and Vacation Properties.
Dec 28, 2023

Is real estate better than sticks? ›

Real estate investing may make sense if you want to own tangible assets and are willing to manage property. But if you prefer a more hands-off approach with more liquidity, stock market investing may be a better option.

Is real estate better than crypto? ›

Those interested in investing in crypto are encouraged to do so carefully and to understand the risks involved. Meanwhile, mindfully investing in real estate can provide steady income and tax benefits. If you put enough time into it, or hire an asset manager, you have the opportunity to skillfully increase returns.

Is Bitcoin a good investment Why or why not? ›

Investing in Bitcoin cryptocurrency has its pros and cons. While its transactions are relatively secure, it's also prone to volatility, with large dips and spikes in price.

Is real estate the best way to invest your money? ›

Real estate is often a rewarding investment, with the potential for passive income and long-term appreciation. It can also be a smart way to diversify your portfolio beyond the traditional lineup of stocks, bonds, and mutual funds.

What is the safest way to invest in real estate? ›

New investors should generally stick to publicly traded REITs, which you can purchase through brokerage firms. For that, you'll need a brokerage account. Opening a brokerage account takes less than 15 minutes, and many companies require no initial investment (though the REIT will likely have an investment minimum).

What is the safest real estate investment? ›

Here are the best low risk real estate investment types:
  • Long-Term Rental Properties.
  • Short-Term Rental Properties.
  • Buy-and-Hold Real Estate.
  • Multi-Family Homes.

Where do the rich invest in real estate? ›

New York, Los Angeles, and London remained the top places with the highest sales in real estate in 2022. While ultra-prime properties, worth $25 million or more, saw higher sales in New York and London. In 2024, the luxury real estate market is expected to improve.

Is real estate a way to become a millionaire? ›

But while the answer to 'can property investment make you rich' is yes, becoming a millionaire through property investing can often take time. Some people will want to be a millionaire before retirement. If you're one of the people looking to maximise your wealth quickly, here are some tips to speed up the process.

Do most millionaires get rich from real estate? ›

Real estate investment has long been a cornerstone of financial success, with approximately 90% of millionaires attributing their wealth in part to real estate holdings. In this article, we delve into the reasons why real estate is a preferred vehicle for creating millionaires and how you can leverage its potential.

What is the number one rule of real estate? ›

For a potential investment to pass the 1% rule, its monthly rent must equal at least 1% of the purchase price. If you want to buy an investment property, the 1% rule can be a helpful tool for finding the right property to achieve your investment goals.

Which type of real estate is best? ›

Commercial real estate

In addition to paying rent, the tenant might also cover property taxes, insurance, repairs, and maintenance, depending on the lease agreement. Commercial real estate generally offers greater income potential, lower vacancy rates, and longer leases than other real estate types.

What is the strongest form of real property ownership? ›

Fee simple is a legal term used in real estate that means full and irrevocable ownership of land, and any buildings on that land. Fee simple is the highest form of ownership — it means the land is owned outright, without any limitations or restrictions other than local zoning ordinances.

Why is Bitcoin better than real estate? ›

Bitcoin is wealth that truly belongs to you. With the threat of war looming around the world, I believe it is better to hold wealth in a digital asset like bitcoin than in physical assets like real estate, gold or art, which can easily be taxed, destroyed or confiscated.

Is Bitcoin the best asset? ›

The world's most valuable cryptocurrency has proved its superiority. Bitcoin's (BTC -1.04%) price has been on an absolute tear. Since the start of 2023, this digital asset has soared 311%, thanks recently to the approval and launch of spot exchange-traded funds.

Why buy a house in Bitcoin? ›

Buyers and sellers store their information securely, but cryptocurrency is instantly verifiable without additional services and processes. Transaction details are visible to all parties. This saves you money without making you hire attorneys, lawyers etc for the same services as traditional transactions.

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