Now that the real estate market has made huge strides in the way of recovering from the Recession, its appeal to investors is growing again. All over the nation, people are looking for ways to turn their money into more money. And real estate is looking like a better option every day.
But, which is safer — real estate or stocks? Where can you get the greatest return? And how much time are you willing to devote? At Jason Cohen Pittsburgh, we are clearly in the real estate camp for ourselves. But is it the right investment for you?
Unless you come from a family in which stocks and bonds were discussed at the dinner table, chances are you’re more familiar with real estate than the stock market. You see homes sitting on the market every day. You know how they can necessitate work when you see a pipe freeze, a roof leak, or a floor wear out. It’s tangible. Stocks are figurative. They exist in another space. When they go bad, it’s just as palpable — but not as visual. You may already know how to repair damages in a home.
Unlike stocks, that are subject to the whims of the market and business decisions made in boardrooms far from your office, you have some level of control over your real estate investments. Sure, weather and human error can wreak havoc on a home, but you can be insured against a great deal of the damage.
Though real estate is generally familiar and fixable, this also means that it is more high maintenance to the investor. You may already know how to repair a damaged bannister, but do you have the time? Stocks and bonds are far removed from your daily life. Aside from monitoring them, they are a nearly effortless investment.
While stocks have generally proven to yield higher returns on investment, they are prone to extreme fluctuations. This can cause a novice investor to panic. Real estate values usually do not skyrocket or hit rock bottom. Their steadiness brings comfort to the investor. You can’t open the paper in the morning to see that the value of your investment property has plunged.
You hear the creed of “diversify” from every financial advisor. Because you can invest less money in each stock than in a single real estate property, you have more opportunities to diversify your investment portfolio. Real estate investors generally invest in a certain geographical area. Therefore, if this region takes an economic downturn, all the investments go with it. Investing less in stocks offers less risk.
Unless you love all the risk and work that goes into real estate investing, the stock market may be a better option for the casual investor. But if you’re like us at Jason Cohen Pittsburgh, and you live for turning that distressed property around, then real estate investing is the path for you.