Invest in Real Estate or Stocks???

[Mega B]

@BusinessAdviser a straight forward statement really as i have been in our current property for 26 years the value has gone up 20 fold,we have another property in scotland which has gone up 4 fold,over say a 50 year time duration property has gone up no end i will agree you have some periods that they pull back but they always continue to rise over the long term.So my statement sounds a logic one to make.

[zachary]

Here is an article on the best way to invest money. Invest money now and enjoy later life. Plan your investment so nicely that it should bear sweet fruit of your labor in your life. Investment now and feel secured.

[cmsgp]

real estate!

[ctreia]

Both offer great opportunities right now. Go with both if possible. Best of luck.

[Dan Nichols]

This Thursday one of the guests at the webinar, Author and Real Estate Diva Wendy Patton will share how you can buy real estate with no risk. I trust her because I've done it myself. It involves lease options of which she is an expert. So, settle the debate there at the webinar.

[MattV]

I love Real Estate and "now is SOOO the time" right?
Well I have a couple of questions from this humble newbie trying to make it big:

What about all those houses that sell for 3000USD? sometimes 750 dollars????
I know, bad shape, bad (not always!) neighborhood, but still, isn't the soil they're built upon worth more?

What I want to know: Where's the catch???? Is it that the maintenance and tax costs of keeping it until the market floats it back is higher than the future resale value?

Please help me understand why people aren't buying houses cheaper than a scooter... because I'm goint to do it. And I'll want an American partner.

Cheers.

[rizham]

I think real estate is much better than stock

[DerekS]

I think real estate is much better than stock

Evidence?

Can people actually post facts, anecdotal evidence, whatever to support their claims? This site is for people to learn stuff, not for people to up their post counts.

[GlobalWealth]

I have to agree with BusinessAdvisor here. This thread is completely and utterly useless. You are getting opinions from people stating 'real estate' or 'stocks'. Both answers are just completely useless.

You invest in what you know. If you know nothing about real estate, you would be foolish to just throw your money at RE. If you know nothing about stocks, same thing. You need to know and understand what you are doing.

First of all, since I don't know your financial status, how much do you have in cash savings? Do you have enough money to survive for 1 year if you lose your source of income? If not, you shouldn't 'invest' in anything. You need this money as your safety cushion. Until you have this safety cushion, investing in anything should be the least of your concerns. You should keep this money in something safe and liquid. There are few options here, but the key here is if you need it now, you can get it now. Cash, short term treasuries, GLD, money market account, and a few others. But don't play with your safety cushion. Having one year's worth of cash is very liberating. It can settle your mind and help you make less emotional decsions. Once you have this in place, now you can start investing.

Remember, investing is a business. Would you start a restaurant without understanding how to run one? Would you start any business without understanding how to operate it? This would be silly, just as silly as buyind SFR, MFR, or commercial RE. And equally as silly as investing in the stock market without understanding how to read and understand financial statements. Do you understand the relationship between commodities and the USD? Between the Euro and USD?

Both RE and stocks can be very profitable, but neither are get-rich-quick. But both can be lose-all-your-money quick if you don't know what you are doing. Maybe you know both. Maybe you know one or the other. If you know how to do one of them, I don't think you would even be asking the question.

RE investing requires a physical presence or a property manager. And even with a property manager, you still need to be available sometimes. Are you willing to be physcially tied to the location? RE is also very illiquid. Are you willing to lose access to your cash for months, years or even decades? Remember just because an appraiser says your property is worth $1m, it isn't worth $1m until someone writes you a $1m check. The plus side to RE is you can be cashflow positive but income statement negative giving you major tax advantages. You can also use leverage if you have really good credit. The important thing to remember on RE is to buy at the right price up front. Don't buy with the hope that one day, as property prices increase and your rents increase, it will be worth something. If it isn't profitable from day one, don't buy it.

With stocks, they are generally very liquid and you can usually get your money pretty quick. You may take a loss on a position, but if you need cash it usually only takes a couple of days. If you hold stocks long term, you can get LT cap gains taxation lowering your tax rate. You can also defer taxation until you actually sell the stock. However, unlike RE, you cannot do a 1031 exchange to defer the gain. When you sell a stock at a profit, you pay tax, period. Stock investing can be done from anywhere you can get an internet connection. this provides you with geographical freedom that RE cannot offer. With stocks, you can also learn to trade options (much trickier and dangerous for the uneducated) and create a regular income stream. If you are really good, you can make a quite large income from selling options, but again without the proper education here it is also a very good way to lose everything you have.

By the way, I have experience in both RE and stock investing. Currently I choose not to invest in RE because I don't want the geographical restriction. I also am not very bullish on RE. I think there is still a lot of excess inventory in the RE sector that needs to be flushed out and prices should continue to drop a bit from here. But with the prices so low now, I am sure there are lots of opportunities, but RE is a lot of work. it is not passive. Currently I manage an investment partnership that operates much like a hedge fund. Primarily invested in stocks using options for leverage and income.

[Beale]

would just like To say Bobby enjoyedd reading your post mate

[orbit]

What is the startup capital required for such a business?

[butchtomas]

Many would agree to go for real estate. However, it is safe to be aware of the economic changes. A colleague of mine bought a huge property in Dubai without being aware of the coming recession. Now, the value of that property is only a third of the original price.

[ryanfromrethink]

I'd most definitely go real estate, as I'm actually about to venture into doing that myself with my brother. Like Vig_Ruddel said, the benefits and maneuverability far outweigh stocks.

As far as stocks go, ASFX:OTC, if you've got a year, gobble it up, I'm already sitting on 50% returns on a xx,xxx investment, and it should end somewhere near a dollar a share in a year(hopefully). I do not live and die stocks, this is just one of those nice little hits which is working for me. THIS IS NOT PROFESSIONAL ADVICE.

ryan

[faisallatif]

stock or real estate....... i would go for real estate because property will never give you loss whereas stocks are volatile in nature and involve higher risk where returns are really low after paying capital gain taxes etc,... but a portfolio of both will be reasonable

[DerekS]

stock or real estate....... i would go for real estate because property will never give you loss whereas stocks are volatile in nature and involve higher risk where returns are really low after paying capital gain taxes etc,... but a portfolio of both will be reasonable

What planet do you live on where RE NEVER produces losses?