Bitcoin is the best store of value without the hassles of Real Estate. Here are 10 reasons why simply buying and holding Bitcoin makes you smarter than a Real Estate Investor (REI):
1) Depreciation
RE depreciates over time because it is made out of organic materials and even though the government allows REI’s to depreciate real estate as a tax incentive, think about it, they are encouraging REI’s to hold on to something that is decaying.
Bitcoin is digital so it cannot physically depreciate. Think of it this way, Walmart owns many physical, brick and mortar stores that will decay over time and not last forever. Along came a digital store, Amazon, that allowed people to shop online and that could theoretically last forever. Amazon dematerialized Walmart’s “brick & mortar” model into a digital model.
Bitcoin dematerialized physical property into digital property. Once REI’s grasp this, they will be buying Bitcoin like hungry hungry hippos!
2) Tenants
REI’s deal with tenants that don’t care about the property because it is not theirs. Bad tenants can lead to the REI having to evict them, fight them in court and deal with fixing a trashed property.
Bitcoin doesn’t have tenants to deal with.
3) Property Managers (PM)
REI’s have to take great care in choosing their PM because a bad PM can be the difference between an REI’s property cash flowing or not. PM’s don’t care about a property like the owners do, they just want their 10% cut of the monthly rental income.
Bitcoiner’s don’t need a PM. They simply store a 12-24 seed phrase in a responsible manner, because if they lose that seed phrase, they lose their Bitcoin.
4) Property Maintenance
REI’s have to maintain toilets, air conditioners, heaters, water heaters, sinks, flooring, roofs, windows, refrigerators, dishwashers, yards, fences, and all the other things that a property has. This is a pain and VERY costly, even if an REI has a PM and are claiming these expenses on their taxes.
Bitcoiner’s simply maintain your 12-24 word seed phrase, ensure it is still in a safe place, ensure you don’t share it with ANYONE, and ensure that it is stored on metal so that it is not lost in a fire.
5) Tax nightmare
REI’s have to painstakingly account for all expenses that they incur on their property so that they can deduct them on their taxes. Imagine saving all the receipts for maintaining toilets, HVAC units, roofs, paint, flooring, caulking, cleaning supplies, gas receipts…and many other things! IYKYK.
Bitcoin is not taxed in the U.S. unless you sell it or send Bitcoin to someone. Smart Bitcoiners don’t plan on selling their Bitcoin and even if they do, the taxes will be much simpler because they just have to account for the cost basis when they bought it and when they sold it. And even this can be tracked for you if you buy your Bitcoin from a place like Strike or Swan.
6) Rent must keep up with REAL INFLATION
REI’s have to ensure their rental income is keeping up with inflation, so guess what? They have to increase rents and tenants don’t like increased rents. Inflation is not the 2% Consumer Price Index that the government tells you it is. Since 2020, the annualized Real Inflation rate is 10-15%. Imagine telling tenants that they have to pay 15% more in rent.
Bitcoin dramatically exceeds inflation because its average compound annual growth rate (CAGR) is ~100%, which after adjusting for 15% inflation, comes out to a real CAGR of 85% (100%-15%=85%). Even if Bitcoin’s CAGR reduces to 50%, the real CAGR would still be 35%.
7) REI’s WILL NEVER own their real estate
Even if their real estate is “paid off,” they don’t own their real estate because they have to pay the property taxes on it for as long as they own it.
As long as you hold the private keys to your Bitcoin, or seed phrase, you TRULY OWN your Bitcoin and you don’t have to ever pay property taxes on your Bitcoin. Just remember, tax laws can change and I will not be surprised if the tax man creates an annual property tax on Bitcoin in the future.
8) Insurance is Expensive!
REI’s must ensure that they own their RE in an LLC so that in the case they go bankrupt, the bankruptcy doesn’t go against them personally. REI’s must ensure that they have umbrella insurance, flood insurance, home insurance, hurricane insurance, earthquake insurance and rental insurance so that if any accidents happen, they are insured. And insurance is expensive!
Bitcoin doesn’t have to be insured. Bitcoiners just need to keep their private keys in a safe place and not share them w/anyone.
9) RE is a LIABILITY
REI’s are liable for paying the mortgage on your rental properties if their tenants don’t pay rent or if they lose tenants. Imagine not having rental income for 1-3 months between tenants or having to undergo a 30-90 day eviction process for a tenant?
So why is it so hard for REI’s to understand that Bitcoin is 1000% better than Real Estate? Most REI’s ,and regular people, can’t wrap their heads around the SIMPLE STRATEGY of Buying and Holding Bitcoin.
Instead they think, “that sounds too easy!” As a former REI myself, I implore all REI’s to, “Keep it simple stupid!” It took me a while to de-brainwash myself from the REI, rent-seeking mindset, and sell all my real estate to simply buy and hold Bitcoin.
If you still can’t come to terms with why owning Bitcoin is far superior to owning REI, read my other two threads:
