Updated September 2026. This is general educational information, not investment, financial or tax advice.
Seven distinctive features of real estate
- Heterogeneity: every asset differs by location, tenure, condition and configuration.
- Illiquidity: selling can take time and incur material costs.
- Leverage: borrowing can amplify both gains and losses.
- Cash flow: rent is offset by vacancy, maintenance, taxes and financing.
- Regulation: eligibility, duties, loan limits and use restrictions matter.
- Management: asset condition and tenancy require active decisions.
- Local cycles: performance varies by segment, entry price and holding period.
Property is not automatically safer or superior to other assets. Suitability depends on concentration, liquidity needs, debt capacity and alternatives.