You know the importance of investing – without a safe haven, you have no way to grow your wealth, and no way to prepare for the future. However, your investment options are not created equal, and you have quite a few choices available. While many will turn to the stock market, that rollercoaster ride is not for everyone. Thankfully, real estate investing allows you to get off the stock market coaster. Why is investing in real estate better than the stock market?
Real Estate Puts You in Control
One of the first things most people realize about playing the stock market is that they have very little control. In fact, there’s almost no control. Sure, you can choose the stock and how much you want to spend, but the rest is all up to the vagaries of the market. And we do mean vagaries – a change in market sentiment can have immediate and dramatic effects on the value of your stock. That’s not the case with real estate. You have near total control, even when investing with a secured real estate fund rather than buying a property directly.
You Have More Options
Another reason that real estate trumps stocks is that you have so many options. You can buy a single-family home, a second home, a vacation home, or a rental property. You can also use real estate investment funds to diversify your portfolio. These allow you to take advantage of real estate investment options that aren’t available to individuals. You can invest in commercial, industrial, and multi-family properties in this way and build your wealth over the long term. Secured real estate funds are also professionally managed, so you get the diversification and protection you need, while still ensuring that you experience less hassle and fewer headaches.
Real Estate Is “Real”
One of the disadvantages to investing in the stock market is the fact that it’s not tangible. It’s not “real” in a sense. Stocks aren’t even pieces of paper any longer. Today, they’re just symbols on a screen. Real estate, on the other hand, is very much tangible. It’s an investment that you can see and feel. That solidity is a good thing.
Far Better Return
The highest return you’re likely to see on a stock is around 4% per year. That’s a paltry sum. Yes, the stock could rise in value, but you won’t be able to enjoy that increase until you sell the stock, which means that you’ll then lose out on the increases thereafter. Real estate has the potential for very large returns. If you invest in the right secured real estate fund, you could see between 8 and 10% on your money each year.
Depending on how you decide to go about investing in real estate, you may be able to write off the depreciation on the property. That saves you a great deal on your annual taxes, and almost anything can be written off. This is particularly true with rental properties, where everything you do to maintain the home or land is technically tax deductible. Compare that to stocks, where you can’t write anything off, and you’re always paying a premium to the government.
No Need for Actual Ownership
If you think that investing in real estate means that you have to personally own the property, think again. There are now new ways to get involved in the market and benefit from investing in property without actually having to own it outright in your name alone. For instance, by investing through a secured real estate fund, you’re able to pool your resources with other investors. That money is then loaned out (in a direct loan) to business owners and developers in need of capital. It makes you an owner of the property along with the other investors, but it does not make you THE owner. It allows you to benefit from the repayment of the capital without having to worry about all the little things that go along with owning and maintaining a home or rental property.
No Rapid Up and Down
The stock market rises and falls with remarkable fluidity. One minute, you’re on top of the world. The next, you’re in a trough and your investment might have lost almost all of its value. It’s enough to make anyone seasick. Real estate isn’t like that. While it does rise and fall in a cyclical fashion, the speed of those movements is drastically different. Not only that, but you know that eventually the property will be worth more again. You can’t say that for stocks, which might become completely devalued and never regain their previous position.
With all that being said, real estate investing is not without its negatives. Buying a home, whether as a primary home for you and your family, as a second home, or as a rental property, can be costly and time consuming. Then, you have the worry about maintenance and ongoing costs like property taxes. This is why many people are choosing to skip the traditional real estate investing process and work with a secured real estate fund that allows them to join forces with like-minded investors and become involved in other forms of real estate investing. Real estate funds also benefit investors by offering a real estate investment portfolio that is diversified across property types and geographies.
Commercial property can be much more valuable than residential property, ensuring that you’re able to maximize your investment. Not only that, but without the concerns that come from holding a physical property, you’re able to invest more money and build your wealth more quickly than would otherwise be possible.
As you can see, investing in secured real estate through a fund is definitely a better option than suffering through the ups and downs of the stock market rollercoaster.
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