There are many ways to invest your hard earned money, and stocks are among the most common. While there are some very successful stock investors (think Warren Buffet), most people realize only minimal returns, and some have lost their entire fortunes (think Great Depression).
The good news is that there is more than one way to invest your money – and real estate may be a more viable solution. Here are just a few reasons real estate is better than stocks:
- More than a piece of paper: When you invest in stocks, you essentially own a portion of the company you bought shares from, be it Coca-Cola, Disney, or Facebook. You have the satisfaction of knowing you own part of the company, and you get a nice piece of paper saying so. You can show people that piece of paper anytime you want to see your investments. With real estate you can drive by your rental property anytime you wish to get a tangible view of your investment. Your friends will be much more impressed when you tell them you own 123 Park Lane, rather than 20 shares of company XYZ.
- Stable Investment: Statistically, stocks perform an average of five per cent annually – if you’re lucky. The problem with stocks is that the market can be extremely volatile, and companies may go out of business, leaving you with an uncertain financial future. Real estate, while it also fluctuates according to market conditions, is generally more stable and will give you an average return of 10 per cent or more annually. If you hold your property long term, this return can become significantly more.
- More control over your investment: When you invest in the stock market, you have very little say in how the company is run. For the most part, you have to sit back and watch from afar all the decisions that are made by the CEO and executives. When you own rental properties, you decide how you want to run your investment business (within the law of course). This puts you in control of your investment.
- People-oriented business: Real estate investing is a people business. Even if you hire a property management company to collect rent from your tenants, you can feel great knowing that you are helping others find affordable housing. Being a landlord isn’t all about making money (although that’s important!) it’s also about ensuring that others have a comfortable and safe place to live. You also get to interact with many other professionals, such as realtors, contractors, property management companies and more. You can also network with other landlords to learn more about the industry and share stories and knowledge.
Stocks and real estate are not the only ways to invest and save for retirement, although these are the two most common. There are pros and cons to each style of investing, and you will have to decide which method suits you best. Don’t make the decision lightly – if you’re unsure of whether or not you want to become a landlord, talk to other landlords to get their input, do some research and consider your personality and risk assessment.
Benefit National can help with all of your real estate property management needs. Visit the website today for more information.