Final answer:
The return on real estate investments should be moderate, as they are made over a long period of time and require a considerable amount of money. Real estate investments can provide capital gains and nonfinancial benefits, such as rental income or the ability to live in the property.
Step-by-step explanation:
The nature of real estate investments, such as requiring a considerable amount of money, being harder to care for, and having a slower turnover, suggests that the return on these investments should be moderate. While real estate investments may not provide quick profits like some other types of investments, they offer the potential for long-term gains.
Unlike stocks or bonds, real estate investments are tangible assets that can provide a rate of return, known as capital gains. This means that the value of the property can appreciate over time, allowing investors to sell it at a higher price than what they paid for it. However, it's important to note that the actual return on real estate investments can vary greatly depending on factors such as location, market conditions, and the specific property's performance.
Additionally, real estate investments can offer nonfinancial benefits, such as the ability to live in the property or rent it out for rental income. These nonfinancial benefits can contribute to the overall return on investment, making real estate a potentially attractive option for long-term investors.