How Real Estate Can win big when Stocks Start to Fall Short

Louis L. Cole
Apr 19, 2018 · 4 min read

It is foolish and impossible to predict how the stock market will be, and often, if your hands are tied you don’t have options. The problem is, if you ask others for advice on this, you’ll get different answers. It is much easier to anticipate the real estate returns though, since you’ve got more control.

Plus, if you’re buying or renting out property, there is a sense of control there when it comes to who will live there. It’s either decided by you or given to someone you trust. If it doesn’t work, you get rid of them and get another out there, and you can always sell if renting doesn’t work. There are more options here.

If you’re struggling with a stock market that’s rising and falling, it’s important to diversify the portfolio that you have by investing in real estate. Why is that? Well, let’s discover the reasons why you need to invest in this, and where you win if the stocks fall.

First, everyone needs a place to live, and there will always be demand for both temporary or long-term properties so long as you choose the right area. Now, owning a property is something that many people don’t want to do since the 2008 bubble caused a lot of regulations to change when it comes to getting a loan. It’s much more difficult, and not everyone can qualify through the rules, even if they can afford it. That’s why people turn to rentals, because it actually will give them a place to live.

Also, rental property gives you the cash flow that you want. Now, if you have about 200K of stock in Apple, and you follow the 1% rule, you should get about 24 grand from this. This may be a decent amount, but the problem is, Apple could change over time, and it could rise and fall, which essentially means you need to figure out a good solution. A rental will be around for a long time coming, provided you put the work into it.

It’s also less volatile than the stock market. While it does have the ups and down like everything out there, but it actually has an upward trend in most cases. The only time there was really ever a downward moment was during the 2008 crash, but it was caused by the market themselves. You should always look at where you’re going with this obviously, because Detroit is a perfect example of areas that are actually losing population, but it always involves actually doing research. While the property values do go up there, it definitely isn’t a location people want to live in due to the crime that happens there. That’s why it’s important to choose where you’re putting your eggs into each basket.

Now, it’s also the factor that the earth population is increasing, but the earth itself isn’t. Land isn’t becoming a huge issue currently, since there are places you can go without seeing any civilization. But, as more areas that are popular start to grow, people are starting to see that the land is more precious, and some popular areas such a Nashville do offer good ways to invest and make some serious money.

There is an advantage to owning property here, and there is value in American property. Lots of foreigners will get property here, and with the strong economy, even with a few hiccups here and there, it’s still a worthwhile place for many to invest, and it’s seen as such.

Finally, there is leverage in this. If you’ve got a margin account for example, you use leverage, but the most you can do is about 50% of the stock price, and not everything is marginable. But, real estate is totally leverageable, and you use mortgage to get it, and there is financing there. Investments aren’t fully financed, and it’s often a much bigger purchase for a stock than for real estate.

Investing in real estate is a great thing, and it’s a way to build a future, so you should definitely consider adding these to your portfolio to guard against your losses.

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