Why Real Estate Over Stocks?
by Fred Myer
Why real estate over stocks? The answer is simple, control over your money. Real Estate is a commodity and it’s finite, and can be looked at much like a stock, but a big difference between them that can’t be underestimated is that you can have lots of control over its value, instead of other people having control over your assets. How many stocks, or other investments that you might own can you personally affect their value or protect that value yourself? Let me answer that for you… “NOT MANY”!
In the stock market, you have no control. The stocks can be split which can be a double-edged sword, you have to call your local stock broker just to buy or sell it, you have to trust other people with more than just your interest because they have other interests to promote/protect, you have to trust them to get you solid foundational company information, or worse you have to trust the earnings reports released by the very companies that want you to buy their shares; and then when you want to sell your shares you can’t just plant a sign in your yard and pray for a buyer like in real estate (although that’s usually not the best way to get the highest price in the quickest amount of time.)!
So for those of you who like to be in control like me, one of the best ways to make money and be in the driver’s seat is to be in title in real estate in a hot, local market you are familiar with. There are some other ways to make money in real estate without being an owner, but that’s for a later article.
I’m kind of a control freak and I think a lot of people who get into real estate are, and boy do you have control, from things like the type of financing you use, where the property is located and in what neighborhood, to the color of paint you put on the house and what kind of fruit tree you want to plant, and when you really think about that as opposed to a stock the differences couldn’t be more stark! It is true that like in the stock market there are bigger players and that can affect your investment, but in real estate the bigger players don’t as easily have the same kind of impact on my home value or real estate holdings.
Let’s say each individual house/address represents a share of stock. Typically houses are sold one at a time and not in a huge block so those other players can’t as easily affect your value. But you can affect your value in a number of ways. There’s the financing part which can have a huge effect on value for the buyer and/or the seller depending on if you are receiving the financing or offering the financing. There’s all the things you can physically do to the investment home to improve and affect its return to you, which consequently raises its value, for instance paint, landscaping, room additions, carpet, new front door, new windows, update appliances, update kitchens and baths and on and on…….. (try that with your stock!) or any other investment you might own that you can’t touch. My motto is “If I can’t touch it, I don’t want to own it”.
Why real estate over stocks? It's about the ability to control your assets and the value contained in them and real estate is where you’re gonna get that. And the Reno/Sparks Northern Nevada area is an incredible market place to jump into. The real estate values that have been pushed by the ‘Tesla effect’ are evident. Look around at what’s happening in our market, the current job market and the 50,000 plus jobs coming and the current and growing housing shortage just to name a few. I believe we are heading into a perfect storm for the real estate investor who’s in title in real estate! I could never have that kind of confidence in stocks.
Fred Myer
Myer Commercial Group
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