Investing in Real Estate versus Stocks
When it comes to investing in land/real estate or stocks, there is no one size fits all. Although both vehicles have proven over the long run to provide excellent returns when handled properly, each person will have their own unique goals, risk tolerance, and capital that they are willing to spend.
Additionally, this is where a financial planning specialist may offer useful insights as well. You may have heard the advice to not put your eggs all in one basket. Therefore, it may even be beneficial to consider pursuing both forms of investments to better leverage your profits.
So our goal is to offer an overview of both sides of the coin in order for you to start forming your own opinion. All in all, it is most important that you proactively take your financial future into your own hands and only pursue the path that you feel will be the best for you and your family.
Benefits of Investing in Land or Real Estate
Many very successful people started out their investing careers in real estate. Plus regardless of what happens in the economy, it is factual that people will always need a place to live. Homes very rarely decrease in value when they are well maintained and purchased correctly.
In addition, land can be an extremely lucrative investment since the world’s population continues to increase, and as a result the demand for land used by residential, commercial and retail entities is always on the rise as well.
With real estate you are offered something that is tangible and can be easier to calculate your due diligence. In other words, after reviewing the property specs with appraisers and inspectors, you have a fairly good idea of what you are getting into.
Downside of Real Estate Investments
First of all, there is typically a lot more time and energy invested in managing your investments. Whether you are renting your property out to tenants or keeping your lots clean and free of debris and coding violations, this is something you will be much more actively involved in.
Next, real estate always has some sort of cost involved. Regardless of what you decide to do with your properties, you will still be responsible for taxes, insurance, utilities, repairs/maintenance and possible a host of other expenses. Plus you can end up overspending and losing your shirt.
Finally, you have to have the proper investment strategy in place. Although real estate has historically been a strong hedge against inflation, you always need to consider your own local trends so you can properly leverage your investments to realize a strong ROI.
Benefits of Investing in Stocks
Unlike real estate, this is an investment that can be essentially placed on autopilot. Aside from keeping an eye on your portfolio for rises and dips, you can leave the management and operation of each entity up to the professional staff. You own a piece of each company without having to work for it.
Even with the Great Depression and other scares that we have witnessed over the last century, stocks have historically proven to be the best return on investment for those who hold on through the tough times and invest their returns properly.
Additionally, it typically doesn’t take a huge upfront investment to get involved in the market, and this is very beneficial for those who don’t have a lot of cash on hand. As long as you choose the right companies, earnings will continue to increase. Selling your stocks is also infinitely easier than listing a property or land for sale as well.
Downside of Stocks
On the other hand, the greatest benefits of stocks can sometimes be the most detrimental weaknesses. For example, though you do not need to actively invest sweat into each company, you are also leaving your finances in the hands of a management team that dictates how things operate.
Therefore, if business takes a nosedive so do your stocks. Some will recover while others may crash and burn. Also, this can be a very emotional game. Especially for those who are getting closer to retirement, the couple scares that we have witnessed in the last decade caused many people to pull out at huge losses.
Finally, stocks can be a lot more unpredictable, especially if you are jumping on the bandwagon of rising trends or promising starter companies. Though some may end up being a homerun, you are always listening to the speculations of gurus or your own gut feeling. Alternatively, real estate can typically be more accurately measured.
In conclusion, it important that you take the time to assess the investment opportunities that are available to you before making any decisions. It is important to look out for your financial future and well being, and we’re here to support you along the way.
If you need more information about how you can get started investing in real estate or land, and want to discover the options available in our local area, take the time to contact us today. We look forward to doing business with you!