Stock Market or Real Estate?
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In the video series I did (click here for Gregg Fous Real Estate Investing Series) I review many of the things that I have learned about real estate investing over the years, from when I started buying property in Ohio, and then later on here in Florida. I think many of you will find it helpful – from large investor to small. Let me know what you think.
In the fourth of the series (Click here for Gregg’s Real Estate Investing Video part four) I speak of Alternatives. Once you as an investor or even as a single family home buyer make the decision to buy a certain property you have crossed a line. You have decided to BUY. What I always suggest is that now that you have decided to commit the $50,000, or whatever the sum is, you need to examine all the other ways that you can place that same amount of money and get it to work for you. Always have alternatives.
For example: you have decided to buy a duplex as a rental property. You and your agent have done the math, you know what improvements are needed, and you like the price. Get your agent to summarize all the criteria that you find attractive and look for other opportunities that compete with it. And by the way, just down look on paper – go SEE the competitive offerings. This process will wither solidify your decision or move you away from it.
But what about alternatives outside of Real Estate? Sure, real estate should be part of any investment portfolio. Me? I prefer real estate over the stock market, bonds or mutual funds. But I have money in them all. My expertise is in real estate. There is more I can control in real estate. This past week the stock market took a nose dive when was I was busy doing something else. What happened was totally out of my control.
There has been a lot of discussion over the past few years with this real estate bubble about how safe and perhaps preferable the stock market is to real estate. Not for me.
Here are some reasons why.
1. I can leverage the money I put into real estate. ( 30% down etcetera)
2. I can physically improve my real estate.
3. I can visit, see, smell and touch my real estate.
4. I can make money with income, appreciation, and tax deductions on real estate.
5. I can increase rents and income and refinance my real estate.
6. My rental property makes money for me while I sleep.
7. Real estate has a kind of forced discipline. I have a mortgage payment I need to make it every month; no one is forcing me to put in so much every month into the stock market.
8. It gives me joy.
9. I have control.
10. Is what I feel comfortable with.
It probably won’t surprise you to know that the money I do have the market is with REITs, Banks, and housing related businesses – because this is what I understand.
I like to stick with what I know.
Until next time,
Gregg Fous GFous@marketamericarealty.com 800-439-1580