Is Real Estate Better Than Stocks?

In this blog post regarding property management, we will look at the fundamentals of investing in stock and real estate. After dissecting them separately, we will look at the similarities, expectations, and realities of the two.

Stocks

Buying shares of stock is a fancy way of saying, "you are buying a piece of a company." That company sells a service/product, and you are entitled to a cut of the profit for every share you own. If a company has 1,000,000 shares outstanding and you own 10,000 shares, you own 1% of the company.

Everyone knows that stocks go up and could have historic highs; on the other side, they can have historic lows. When purchasing stock, it is a given that they understand it is a risk and must be prepared for ups and downs.

Real Estate

Purchasing real estate is straightforward: you buy a property, fix it and collect the rent checks, right? I wish! On the contrary, there are expenses that occur ALL the time. You must plan ahead and save for repairs, upgrades, and property malfunctions. There are NO surprises here. If you're ever to the point where something catches you "off guard," then you weren't prepared. There is no such thing as an unplanned expense in real estate, just like there is no such thing as a random drop in the stock market.

Whether you're a seasoned investor or a first-time real estate investor, don't get caught with your pants down. I wrote an article a few months back that gives you a good idea of what to save and how much to save given the property you own.