Hannah Hammond explains why real estate still beats index funds and crypto. You can borrow 70-80% of the purchase price from banks, rents rise with inflation, and depreciation cuts your taxes. Her rental properties pay her car payment every month.
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Why bother in real estate in 2026 when you could just buy an index fund or cryptocurrency? There's 5 main reasons. Number 1 is tangibility. It's a physical asset with intrinsic value. We all need real estate. It provides a roof over someone's head or a floor for their business. Number 2 is the inflation hedge. As the cost of living goes up, so do rents and property values. It's a natural protector of purchasing power. When your money's in the bank and the government keeps printing money and inflation continues to occur, your purchasing power goes down and your money loses value. Real estate is a great storehold of value, and as inflation continues, the real estate asset value continues to go up with inflation. 3 is leverage. It's one of the only assets where a bank will lend you 70 or 80% of the purchase price at relatively pretty low rates. Number 4 is cash flow. Unlike a growth stock, real estate pays you to own it. Real estate isn't about getting rich overnight. It's about building a foundation that is difficult to disrupt, and having cash flow is how you have true financial freedom. Because without cash flow, if you just have equity appreciation, you may look like you're making money on paper, but that doesn't actually pay your bills. So for me, I have a G-Wagon. It's a $250,000 car. Well, my real estate assets pay for that car payment every single month while I sleep. That's pretty cool. I don't have to worry about if I have enough money coming in this month from my earned income to pay for my vehicle because I know that my rental properties have it taken care of. And the fifth reason is the tax advantages with real estate. It's so amazing because you don't have to pay a lot of taxes generally on the cash flow that is generated from your real estate assets, and even more so if you're in business of real estate. If you're a real estate professional, you can do something called accelerated depreciation, and this will accelerate the depreciation of the asset and reduce your taxable income tremendously, even on your earned income. If you're not a real estate professional, you still get amazing tax advantages because you can use that depreciation against your passive income. So if you have assets that are providing you with passive income, let's say it's making you $5,000 a month, that depreciation will offset that income so you don't actually have to pay taxes on the $5,000 a month gain. So when you don't have to pay taxes, then This makes you more money and puts more money back into your pocket.
