Invest in Real Estate, Not Bonds

Invest in Real Estate, Not Bonds

Ever wonder about investing in real estate or bonds? Currently, the stock market is not doing so well. I had dinner with an investor last night and he is not doing so well in the stock market. He wants to put it all into our company for Multi-Family. I decided to write an article about why I think you should invest in Real Estate and Not bonds.

The question, most times, is whether to invest in real estate or bonds. Both businesses have proven to be a real goldmine these past decades, and so many people have become millionaires, and even billionaires simply by having invested in real estate or bonds. To better understand the concept, it would be good to define each of the businesses.

In real estate, you are buying land, houses, or other types of buildings that you give out to others for rent. When people rent your property, they pay you money per month, or any other agreed interval, which, after paying necessary expenses including tax and maintenance, you are still able to pocket some money as profit.

As for bonds, you lend money to a company, and they pay you interest regularly until they pay back the original money they borrowed, with some interest, at an agreed date. The bond issuer, the company, maybe a corporate or one owned by the government. It may be that they need money to start a project or something similar, with no cash at hand. The best thing would be to issue the bonds to prospective borrowers while paying them interests according to the specification of the agreement.

All over the country, so many people have their money invested in either of the two, but which is better? If you have some money you would like to put into good use while reaping huge profits from it, then it is best you invest in real estate. Real estate offers investors more advantages and benefits than they work to enjoy in other investment options like bonds.

Some of the key advantages include

1. Sustainable Cash Flow

The most distinct thing about real estate is that you would always have money coming in, at least on a monthly basis. This money is derived after making payments such as mortgage and other expenses. Depending on the kind of property you own, it may never be completely empty, and money would always flow in from that side. This is quite unlike bonds where you are paid interests that may not come in as regularly as in real estate. Also, the money that comes in is likely to increase or reduce overtime, unlike bonds that are fixed.

2. Real Estate is Great If You Need More Money in the Future

If you see yourself needing more money or having to depend solely on your investment in the coming future, most likely due to retirement, then real estate is the best place to invest in. Money that you gain from your property increases over time, due to the fact that, in the years that go by, you would offset most payments, and would be able to keep more money than before. This allows you to have it as a sole source of income when you have nothing else again.

3. Real Estate Appreciates

Unlike other forms of investment, including bonds, real estate appreciates. What this means is that as time goes on, the properties gain more value, allowing you to make more money from it than you initially did. On an average scale, real estate properties appreciate on a scale between 3% - 4% every year. This is unlike other investments where there is no given chance of appreciation.

4. Greater Returns

Investors receive an average of 8% return of investment per year. The figure could be as much as 12%, and it is gotten from rental fees. This gain is unlike what you would get in other investment options, including bonds.

5. Real Estate is Easier to Get Involved In

Not everyone has money to lend to a company or even knows how to go about it. But most people are familiar with the concept of real estate and may even know people who are into the business. This makes it an easy choice of investment since you are already familiar with what it is all about - renting outhouses.

6. Easier to Finance

To get started in real estate, you do not need to have the complete money to purchase a property, as it is easy for you to secure loans and other facilities that can help you acquire it, while you pay back the money over a course of years. This is not the case with bonds as it is hard to get a lender to give you money simply because you want to give to a company.

7. Real Estate can be worked on

If it ever gets to a time when you feel the return on your investments is reducing, or getting the thing, you can always work on your property to increase it. The returns do not even have to reduce before you take such steps. The beauty of real estate is that you can always work on it to make it more attractive to draw people to rent it, and also increase its value, allowing you to collect more rent for your property.