Investing in real estate over stocks

Investing in real estate over stocks

In this hub, I discuss my points in investing in real estate over stocks as a primary investment instrument. To avoid confusion, the type of real estate I am referring to are condominiums, and nothing else.

Most of my business associates and close friends always ask me where I put my investments since they think of me sort of like a success, after retiring at relatively a young age (believe me when I say I am not young, but then with my circle of friends, my retirement is sort of a miracle). Besides having a good paying job back in the days I used to work, I also tucked away investments as soon as I had enough money to start investing. I have invested my money in stocks, business ventures, and real estate. So far, in my opinion the best overall would be with real estate.

Do not get me wrong, I have earned more in my business ventures than in real estate, but these were earned after a considerable amount of loss in my part of my capital. Real estate on the other hand, provided me a safe and tangible investment instrument that I could put money into. Especially in the past decade where there have been a multitude of pre-selling condominiums in which I could invest in, I have made a nice profit out of them through rental income and the resale of my units.

It says in my research that stocks are the best investment overall, why say otherwise?

In some ways I agree, stocks are usually higher yielding and if you pick the right ones you are assured of a very hefty margin, that is, if you pick the right ones. Real estate on the other hand for me is less technical and provides people with lesser business acumen (such as myself, but again my friends say otherwise) to put their money into something that will surely increase in value over time.

Real estate is for the less savvy investor, and that is a good thing

Most of us do not have the time to look at our investments constantly. I experienced this back when I had work and started looking for ideas to put my money in other than my bank account. I decided to put my investment in Philippine real estate because it seemed as though it was something I could do without having to trust someone else to make my decisions for me.

It turns out I was right. Choosing a condominium to invest is very simple and requires you to check the location this new development is going to be built and the possibilities for growth in the area. Stocks on other hand involve a lot of analytical thinking, checking graphs and such for the optimal investment. The timing for stocks usually vary, since there are cyclical trends you have to take note of. For real estate your best move is simply buying early especially for the pre-selling projects, this is always your best option.

Stocks can suddenly lose value overnight

Stocks can be exposed to greater risks than that of real estate. A stock’s value is sometimes presupposed by the perception of the people at the time, and not necessarily due to the rising performance of the company or its provision for dividends. Real estate on the other hand is usually pegged on its real value—if there are property bubbles, these usually correct themselves with time, and the real value is not lost overnight. Stocks on the other hand can sometimes fluctuate in price, overnight. If you are the type of person that likes to keep tabs of all his/her investments constantly, then maybe stocks are not for you.

Real estate is very tangible

Real estate unlike stocks is something you can use and add improvements on to increase its value. Stocks on the other hand are no different from money in the idea that it is ‘a piece of paper’ that signifies ownership in a company or firm. Since real estate is tangible, in the Philippines, it could also be used as collateral for loans—which eliminates the doubt that real estate makes you less liquid. On the other hand, it could be used as collateral for your loans of other investments. This is what makes it very useful.

Real estate can be used to accrue rental income

This is what is special about condominiums since most could be rented out for additional income. The amount you gain from rental is put on top of the value of your condominium. For very good condominiums in prime locations this could be advantageous and could add to your monthly income. Multiple condominium units mean a very significant income for you.

These are just some of the advantages of condominiums over stocks. I hope you find these information helpful when thinking of investing in condos.


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