Why Duplex Investment Is a Good Hedge in Times of Uncertainty
When the U.S. feels wobbly—politically, economically, culturally—people start asking the same question: “Where should I put my money so it’s safe?”
Sure, there’s always gold. But because other people have already thought of that, it’s currently trading at an all-time high of $4800 per ounce.
What are the alternatives? Believe it or not, real estate. It’s an investment that actually absorbs chaos better than almost anything else. Why? Because it’s something you can use, it has a finite supply, and the life events that usually cause someone to buy, sell or invest in real estate happen regardless of what’s happening in the rest of the world.
In fact, here are 7 reasons why real estate is a safe bet during troubled times:
- People Always Need Housing. Whether there is political calm or uncertainty, a booming economy or a recession, people always need a place to live. And that place often needs adjustment in size or location due to things like getting married, having kids, getting divorced, moving for a job, downsizing or upsizing. During times of uncertainty, people may delay buying a property. This often makes the rental market especially strong, which benefits multifamily property owners.
- Real Estate Is a Hard Asset in a Soft World. During American uncertainty, the things that scare people most include currency debasement, stock market volatility, and sudden changes in policies or rules. Stocks are really nothing more than claims on paper. Technically, cash is just a promissory note. Real estate, however, is something you can physically touch. You can control improving it. You can rent it, live in it, and unlike stocks, insure it.
- Inflation Is a Benefit. Rents tend to rise over time, while your mortgage payment remains the same. If the dollar weakens due to a sluggish economy, you’re actually paying down your debt with cheaper money.
- Leverage. In most investments, leverage is dangerous. In real estate, it’s normal. Thanks to banks, you can control a large asset with long-term fixed debt, relatively predictable expenses, and the ability to add value. In times of uncertainty, leverage becomes even more powerful. Lending standards tighten, meaning fewer people can qualify to buy. That means existing owners gain an advantage.
- You Can Actively Protect Your Position. If your money is tied up on Wall Street, there’s nothing you can outside of buying and selling to actively improve your position. With real estate, however, you’re not a passive spectator. You can improve things by:
- Raising rent
- Cutting expenses
- Improving units
- Self-managing
- Refinance when conditions shift.
6.Duplexes Are Quietly Defensive. Small multifamily properties like duplexes, triplexes and fourplexes are in something of a sweet spot. They are too small for big, institutional investors. They’re too complicated for casual hands-off investors. Yet they’re perfect for owner-occupants, multigenerational living, downsizing and people who want to buy and hold property. That creates durable demand, even when the number of real estate transactions drops.
- You Can Live in Your Hedge This is wildly underrated. If things really go sideways, you can always live in one unit. This helps reduce or even eliminate your housing costs. Try doing that with stocks. One of the many benefits of real estate, particularly a duplex, is it blurs the line between an investment and life stability. In uncertain times, that overlap is powerful.
When life feels uncertain, useful things hold value. And housing—especially small, boring, two-unit housing—has been useful for a very long time.
That’s why it keeps working.