The real estate market is hot, especially when you can consistently buy low and sell high. The seller’s market that continues to bring in above list-price bids is a great reason to invest in real estate. Whether you’re new to real estate investment or you’ve been in the industry for some time and are considering a switch to investing in stocks, the below pros and cons are meant to give you insight into the best bet for your financial future.

Pros Of Real Estate Investment

  • Valued: Owning a home is part of the American Dream. Investing in real estate is understood by the majority of Americans because they grew up hearing parents talk about the importance of owning a home, so it makes investing easier as it’s understood to be a desired asset.
  • It’s tangible: Investing in real estate makes sense to many because they obtain a tangible object – land or a home – even if it’s kept for only a short period of time. You can see it, walk through it, send a photo of it, and stare in dismay at the wallpaper that’s lasted since 1982. For some investors, the tangible aspect is an important psychological factor.
  • Difficult to defraud: Investing in real estate, compared to other areas where you can secure your money, like stocks, gives you the opportunity to ensure you’re making a good choice. You can visit a physical property, hire an inspector, and sift through land records before choosing to invest in a particular property. This isn’t the case with stock investment where you’re forced to trust financial advisors and the market can become volatile quickly.
  • Leverage benefits: It’s often safer to structure leverage, or debt, in real estate than in other financial areas, such as using debt by trading on margin to buy stocks.
  • Protects against loss: Investing in real estate has historically proven to be a strong inflation hedge to ward against a loss in buying power.

Cons Of Real Estate Investment

  • Hands on: Unlike some investment options, real estate comes with heavy, hands-on work. As a real estate investor, you’re the go-to when a pipe bursts, building materials aren’t delivered on time, or there are tenant problems. Even with a property management group, you’re still the one who makes the final decision – which can require middle of the night phone calls and DIY weekend projects.
  • Fees: If you flip properties, you’re paying for a monthly mortgage while you wait on a buyer or tenant. Despite the property being empty, you still must pay taxes, insurance, maintenance, and other required fees.
  • Time: Unlike stocks that can be bought and sold in a matter of seconds, in can take days, weeks, even months to make a real estate deal. Your deal depends on finding a buyer or the right tenant, even in a seller’s market.

Investing in real estate comes with hard work, but if you’re willing to put in the manpower hours – or hire those who will – your investment can pay out big, especially in the seller’s market that is holding strong in 2018.

  • Valued: Owning a home is part of the American Dream. Investing in real estate is understood by the majority of Americans because they grew up hearing parents talk about the importance of owning a home, so it makes investing easier as it’s understood to be a desired asset.
  • It’s tangible: Investing in real estate makes sense to many because they obtain a tangible object – land or a home – even if it’s kept for only a short period of time. You can see it, walk through it, send a photo of it, and stare in dismay at the wallpaper that’s lasted since 1982. For some investors, the tangible aspect is an important psychological factor.
  • Difficult to defraud: Investing in real estate, compared to other areas where you can secure your money, like stocks, gives you the opportunity to ensure you’re making a good choice. You can visit a physical property, hire an inspector, and sift through land records before choosing to invest in a particular property. This isn’t the case with stock investment where you’re forced to trust financial advisors and the market can become volatile quickly.
  • Leverage benefits: It’s often safer to structure leverage, or debt, in real estate than in other financial areas, such as using debt by trading on margin to buy stocks.
  • Protects against loss: Investing in real estate has historically proven to be a strong inflation hedge to ward against a loss in buying power.
  • Hands on: Unlike some investment options, real estate comes with heavy, hands-on work. As a real estate investor, you’re the go-to when a pipe bursts, building materials aren’t delivered on time, or there are tenant problems. Even with a property management group, you’re still the one who makes the final decision – which can require middle of the night phone calls and DIY weekend projects.
  • Fees: If you flip properties, you’re paying for a monthly mortgage while you wait on a buyer or tenant. Despite the property being empty, you still must pay taxes, insurance, maintenance, and other required fees.
  • Time: Unlike stocks that can be bought and sold in a matter of seconds, in can take days, weeks, even months to make a real estate deal. Your deal depends on finding a buyer or the right tenant, even in a seller’s market.