Big Advantages Real Estate Investing Has over Stocks

If you ask the average person which of the two investments is sexier and more exciting – real estate or stocks – a majority of people will definitely go with the stocks. The reason is actually simple. Stocks can be volatile, which definitely makes them exciting but not always profitable. Stocks also offer a wide variety of sectors to invest in. For example, you can choose technology stocks (very sexy) or gold stocks or even something very boring such as a blue chip food stock. It also allows you to diversify your investment portfolio and spread your risk across a number of industries to insure some type of profit at the end of the year.

With all these advantages to buying stocks, why would anyone look at real estate as having any advantage at all as an investment. The truth is that the advantages of real estate are so obvious they are often overlooked. This is true of both passive and active real estate investors. An active investor is someone who constantly is on the lookout for new opportunities or may want to flip a house several times a year. A passive investor is someone who just wants to use their real estate investment as a source of passive income that is steady and reliable.

The first major and undisputable advantage is that you have complete control over your investment. For example, if you are an active investor and want to constantly be involved in the buying and selling of properties, you can schedule your time to directly research and see the property firsthand. You can eliminate the massive amounts of time spent on researching a stock and replace it with a far less investment of time while having a personal experience with the real estate seller.

For passive investors, you can decide the amount of time you want to spend improving your property. Active investors can do this as well, but the fact that a passive investor can only accentuates the point. If you own an apartment complex and are receiving regular monthly rents, you might decide to improve the property and upgrade the carpeting or electrical system. You have complete control over when you want to do it, how much you are willing to pay for the service, and whether or not such an upgrade will support the idea of a rent increase.

While companies can also make improvements, it is not certain that those improvements will lead to an increase in the price of a stock or any dividends. As a real estate owner you know exactly where your money is going, and for what.

A second undisputable advantage of real estate is collateral. A piece of real estate has a specific value that a bank or loan company can use to determine your creditworthiness, allowing you to get the cash when you need it. Stock is in a whole different class of collateral, and if you want to get a loan it is not likely you will be able to get an exact valuation of the stock when you need the money. If you want to sell the stock it will take at least one day to convert it to a liquid asset that you can use.

Also, collateral can be physically be seen by potential buyers, unlike a stock that is susceptible to change in valuation within minutes based on the whims of nervous stock market investors. A real estate investment can be seen and appraised, letting the lender or buyer actually see the condition and quality of the asset.

These two “Cs” – control and collateral – make real estate a far superior investment when compared to stocks. In fact, it is hard to imagine that a stock can offer as much control as a piece of real estate. When it comes to the knowledge of a stock versus a real estate property, your knowledge of the stock and stock market is not likely to affect the price of your investment. When it comes to real estate investments, knowledge is definitely power and you can buy and sell for a more advantageous price because of what you know. The more you know, the better of an investor you will become.


Add Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

How Ray Romano Achieved a Net Worth of $130 Million
Lakshmi Mittal
The 20 Richest People in India in 2019
Newmont Goldcorp CEO
10 Things You Didn’t Know about Newmont Goldcorp CEO Gary Goldberg
Michael Ashcroft
How Michael Ashcroft Achieved a Net Worth of $1.6 Billion
Advice on Obtaining a Credit Card as a College Student
Takeaways from The 2019 Student Card Survey from Creditcard.com
American Tower
Why American Tower is a Solid Long-Term Dividend Stock
The 10 Best Credit Cards for Back to School Shopping
20 ‘Smart’ Technologies That Will Be Available Before We Know It
embedded personal devices
Where are We With Embedded Personal Devices?
20 Smartphone Technologies That Will Blow You Away
bullets that change direction
Where are We With Bullets that Change Direction?
WOW Air
The 20 Worst Airlines in the World in 2019
Swift and Sons
The 20 Best Steakhouses in Chicago
Caladesi Island
The 20 Best Beaches in Florida in 2019
Why La Cosecha Argentinian Steakhouse is One of Miami’s Finest Steakhouses
Hybrid Cars
The 20 Best Hybrid Cars of All-Time
Rolls Royce Silver Seraph
The Rolls Royce Silver Seraph: A Closer Look
The Rolls-Royce Silver Spirit
The Rolls-Royce Silver Spirit: Its History and Its Evolution
Rolls Royce Twenty
A Closer Look at the Rolls Royce Twenty
A Closer Look at the Hublot Bigger Bang
IWC Big Pilot's Watch Constant-Force Tourbillon Edition Le Petit Prince
A Closer Look at the IWC Big Pilot’s Watch Constant-Force Tourbillon Edition Le Petit Prince
A Closer Look at the Jaeger-LeCoultre Master Ultra Thin Tourbillon
Time Traveling: The Hublot Classic Fusion Zirconium