As we’ve watched the stock market dive throughout the first few weeks of 2016, now may be a good time to talk about various investments and who really controls what when you take hold of a particular type of investment vehicle.
For example, when you purchase an investment such as a stock or a bond, you are essentially tied to whatever return or value the market dictates on these particular vehicles. When you purchase real estate – even though this type of investment can also be dependent in large part on market conditions as well, to an extent, there are also many things that you as an investor can do in order to increase the overall value of that investment. Therefore, you have much more control over real estate than you do when compared to other investment options.
How so? For one thing, you decide how to manage the property, as well as what to do with it. For instance, in comparison to purchasing shares of stock, you really have no control over what the CEO will opt to do with the company, what products or services the business offers, or when the business will have good or bad economic news.
In addition, the stock market can also be highly driven by investors’ emotions. When investors hear bad news in the media, they will oftentimes quickly sell off their shares, which in turn, brings the overall share price down even further. Even worse, if the company ends up going bankrupt, you stand to lose all of your investment. But when you invest in property, you alone can make all of the decisions.
On top of making the decisions regarding management and improvements about the property, you can also decide when the property should be sold. With other types of investments such as CDs or bonds, you may be locked into a particular time frame whereby if you sell “too early,” you will be penalized. Not so with owning property.
There are numerous advantages to having a well diversified portfolio of investments that includes investment real estate. And, by hiring a well qualified property manager, you don’t have to spend a lot of time finding tenants, collecting rent, or managing the property itself.
For more information on the many benefits of investment property ownership, give us a call.