DISCLAIMER: Any and all project project performance claims do not in any way guarantee or promise future success of any apartment investment.
Real Estate investors have the ability to gain more leverage on their capital and see some tax benefits. Although real estate is not as liquid as the stock market, the long-term cash flow provides passive income as well as appreciation.
Real estate has outperformed the stock market approximately two to one since 2000, earning 10.71% annually versus 5.43% for stocks. Due to this contrast in returns, many money seekers are cashing in and leveraging real estate by acquiring rental properties.
Real estate monthly rental income (cash flow) can increase with inflation even in a rent-controlled area, offering an additional advantage.
Another consideration is taxes after selling the investment. Selling stocks typically results in capital gains taxes. Real estate capital gains can be deferred if another property is purchased after the sale, using a 1031 exchange.
Investors need to have the ability to secure a down payment and financing if they aren’t making all-cash deals.
Since real estate isn’t as liquid, investors can’t rely on selling their properties immediately should a need occur.
There are costs associated with property management and the investment of time that goes into the building’s upkeep.
For house flippers or those who have rental properties, there are risks that come with handling repairs or managing rentals on your own.
Dealing with tenants can cost a great deal and a time suck. It isn’t something you can do during your off-time—especially if it’s a rental. Tenants will always need something, and you may not be able to put them off if there’s an emergency.
As an investor, you may want and need to consider hiring a contractor to handle repairs and renovations of your flip, or a property manager to oversee the upkeep of your rental. This may cut into your bottom line, but it does reduce your valuable time overseeing your investment.
We solve these problems for you-
Our sponsorship team and the apartments we invest in qualify for the multi-million-dollar loans needed – so you don’t have to worry about finding funding
Investors get cash-on-cash return and liquid quarterly dividends while we hold property. Investors can swap shares with another qualified investor if you have a life event.
The larger the property the more economies of scale.
o For example, an Air BnB manager might charge a 25% management fee. In contract, our managers are 3.5-5% of apartments income.
Upkeep is maintenance man’s job! No more spending your weekends sweating at a rental!
Property Manager oversees construction day to day and deals with the “people aspect” of tenants.
Let’s compare what we do to the stock market
Stock market risk-
The stock market is subject to several different kinds of risk: Market risk, economic risks, and inflationary risk.
Stock values can be extremely volatile, meaning prices are subject to fluctuations in the market. Volatility can be caused by geopolitical as well as company-specific events.
o For instance, a company has operations in another country. This foreign division is subject to the laws and rules of that nation. But if that country’s economy has problems, or any political troubles arise, that company’s stock may suffer..
Stocks are also subject to the economic cycle as well as monetary policy, regulations, tax revisions, or even changes in the interest rates set by a country’s central bank.
Becoming a confident investor takes skill, not secrets
There’s no magic secret. Becoming a financial investor takes time and a dedication to education. My favorite book when starting apartment investing is The Perfect Investment by Paul Moore. It compares, stocks, mutual funds, bonds, oil, single family rental investments versus apartment investing. It discusses the pros and cons not just painting a pretty picture of Multifamily investments. It’s a quick read also on audiobooks.
If you’re ready to start investing into real property and creating more independence from the rat race please book a call here: https://calendly.com/kaylee-6/15min
Or email us at [email protected] to learn about future offerings.
Most of the comparison information in this post is from Ryan Boykin originally posted here! https://www.investopedia.com/investing/reasons-invest-real-estate-vs-stock-market/
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