Investing in Real Estate

[barnidge]

Hey all! I am interested in purchasing some property while the economy is in a slump. I have been deciding between real estate and the stock market but I cannot find any companies that I am comfortable investing in at this time. BTW, I am 20 years old and would only be able to do this part-time. Any advice is appreciated.

Do you recommend any books to read to get general knowledge?

 

[barnidge]

bump

 

[Norman Bates]

Buy a stock fond (hope that´s the correct English term, didn´t find it in my dictionary). The fond manager will choose which stocks the fond buys, so you don´t have to choose.
And the stock market had a recession recently, so i think the chance of loss is relatively small, while there´s a good chance that there might be a good increase.
But that´s just my opinion, so don´t hold me responsible if you loose money that way

 

[Norman Bates]

Stocks or fonds usually outperform real estate, but real estate has less risk than stocks. If u think that the economy is about to florish you should buy stocks/fonds if you think that there will be more depression real estate will perform better. Of course u can split your money and invest in stocks and real estate to hedge your risk.

 

[vinylgroover]

I work in property development, and always sing the praises of property over stocks.

With real estate, you always have an underlying asset that you can always sell, even if you lose money. With stocks, you don't always have that luxury. Stocks is just a piece of paper, with no underlying value. It's paper money so to speak. You just have to look at the Enron collapse, it can happen to any company that is poorly managed, and you end up with nothing.

The negative with real estate is the high entry cost and illiquidity. However, if you are looking long term, liquidity shouldn't worry you.

The other adavantage of real estate is that you make the decisions. When you invest in stocks, you have little or no say in the management of the comapny you have stocks in, and if you invest in another Enron, god help you.

 

[barnidge]

Thanks bumps

 

[bigguns7]

I think a good advantage of investing in real estate is the immediate cash flow. I believe that to get rich quick, you must have money coming in the door at all times. The stock market doesn't really allow that, but real estate investment does. If you invest in a 401(k), you're investing for cash flow 40 years from now. If you invest in real estate today, you could conceivably have cash flow tomorrow.

This is not to say that stocks don't have their place in an investment portfolio, this is just to illustrate the benefits of investing in real estate.

 

[Steroid_Virgin]

The economy may be in a slump. but the housing market isn't.. Most housing / rental property is still way over priced, it's a sellers market. This is all being driven by low interest rates and it will probably stay that way for the near future.

 

[mrbill]

barnidge...I don't know your financial situation but you seem somewhat young to have acquired a substantial capital base. I say this because real estate is a good investment and especially a good hedge against inflation but generally requires significant capital. If you are wealthy I would say definitely invest in real estate as part of your overall portfolio. Don't go 100% into any one thing as your investment portfolio. Stay diversified. Different investments have different advantages, the key is balancing risk vs return for you particular situation. good luck.