Real asset
What is a tangible asset?
The term ‘tangible asset’ refers to material assets that play a central role in the economy and in the investment sector. Unlike intangible assets, such as patents or trade marks, tangible assets exist in physical form and possess intrinsic value. As a rule, property, commodities and other tangible assets are categorised as tangible assets.
The importance of tangible assets in investment
Tangible assets are regarded as one of the most stable forms of investment, as they are often less volatile than, for example, the stock markets. Investors view tangible assets as a hedge against inflation and economic uncertainties. Some of the most common types of tangible assets are:
- Property (residential and commercial)
- Precious metals (gold, silver)
- Commodities (energy, agricultural products)
- Collectables (art, antiques)
How are tangible assets valued?
Tangible assets are often valued by analysing their specific market and using key indicators that influence their value. Some valuation methods include:
- Income approach (particularly for property)
- Comparable sales approach (taking similar properties into account)
- Cost approach (direct estimation of material costs)
Accurate valuation is crucial for investors to make informed decisions and to minimise the risk of a bad investment.
Tangible assets and diversification
Diversifying one’s investment strategy through the use of tangible assets can help to reduce overall risk. By combining tangible assets with other asset classes (such as shares or bonds), investors can create a robust portfolio that is better equipped to withstand market fluctuations.
Advantages and disadvantages of tangible assets
As with any form of investment, tangible assets have both advantages and disadvantages:
- Advantages: stability, value retention, protection against inflation
- Disadvantages: Lower liquidity, higher acquisition and management costs
Tangible assets in the context of off-market investments
Off-market transactions are a key topic in the field of property investment and tangible assets. These transactions take place outside the usual buying and selling markets and often offer investors the opportunity to acquire attractive tangible assets before they are made available to the general public. This potentially means less competition and often better purchase prices.
The role of Porta OFFMARKET24
The Porta OFFMARKET24 platform plays a crucial role in connecting investors with off-market tangible assets. Through access to a network of like-minded investors and providers, tangible assets can be efficiently brokered, facilitating access to exclusive opportunities.
A clear example of the topic: tangible assets
Imagine that Max is a dedicated property investor. Over the years, he has built up his portfolio with various tangible assets, including several blocks of flats and commercial properties. Through a contact in a property group, he is presented with an attractive off-market offer for a property in need of refurbishment in an up-and-coming neighbourhood.
Max knows that such off-market transactions often offer better terms and less competition. He analyses the asset, calculates the renovation costs and forecasts future capital appreciation. After a thorough review, Max decides to purchase the property. A few months later, he has completed the refurbishment and rental income is soaring thanks to the benefits of his counter-cyclical investment strategy. Max impressively demonstrates how one can achieve success through shrewd investment in real assets.
Conclusion
Tangible assets are a valuable addition to any investment portfolio. Their physical presence and resilience to market fluctuations make them extremely attractive to investors. With the right strategies, particularly through off-market investments via platforms such as Porta OFFMARKET24, investors can benefit from the advantages of an asset-based approach.