A common mentality that people may have in terms of investing, especially with something like stock or properties, would be “the bigger the risk the greater the reward.”
If the right decision was made, “the reward” might pay off in the end, but then again, there’s always that 50 percent possibility that your investment may end up a mistake that you may not be able to recover from.
While many consider buying stock would be the go-to move in terms of investing, others might say that investing in real estate may be the wiser alternative over time due to its steady nature.
Today, the Edinburg owner-financed lots realtors of Santa Cruz Properties are here to ultimately break down the two differences between investing in stock and land, and explain why investing in property might be the better move for a greater return.
Investing in Land
Perhaps one of the biggest things that helps differentiate owning stock and owning land is the fact that land is a physical investment that you can build on overtime to make it more valuable. On top of this, the investment in land itself is far less complicated in comparison to stock and even comes with a bevy of benefits.
You can do as you please with your own property, so long that it complies with local and/or federal law and homeowners associations. You may want to keep it for years, physically build something on it, sell it, or pass it on toward future generations; all of these decisions are completely up to you, the owner.
There is also a far less possibility of being defrauded by investing in land, and it can be a great Inflation hedge the longer you have it. In order to keep it a sustainable investment, however, there has to be more work and consideration that goes into your property.
Not only is it a big investment with all the down payments and research in total estimations that have to be put in beforehand, but there are also property taxes that you have to pay that varies by the area. Land needs also needs frequent maintenance as well in order to keep it in the best shape you can.
When you buy shares in stock, you are owning a piece of a company. The more stock you invest, the bigger the portion of said company you own.
Stocks are what is known as “liquid investments,” meaning they are much easier to get rid of and make money off of quickly in case you aren’t able to hold on to them for whatever reason you may have. If the investment you made was fruitful, you can receive bigger dividends based on how much you originally invested.
While it may be appealing to invest in a company, stock investments come with a number of risks that have a much higher impact. The stock market can be a volatile medium to invest in, and anything can happen at any given time that affects the total value of your stocks.
Certain worldwide events or even incidents involving shareholders that can have a negative impact on the company, which ultimately affects your stock values. Your shares can plummet in a disastrous fashion in a little amount of time, eating up your entire investment.
Enough statistical evidence exists that can support the fact that investing in a real estate property can be more beneficial in the long run over trying to rely on an unpredictable stock market that can go both ways at any given moment.
In fact, as of 2016, over 50 percent of Americans decided not to invest in stock as they were still recovering from the Great Recession that occurred between 2007 to 2009. Additionally, since 2000, real estate investments have seen more of a positive return over the stock market with property investments growing 3 to 4 percent in return investments annually and up to 8 to 12 percent if landowners decide to rent out their property.
While it may be more of an investment, both financially and emotionally, investing in owner-financed land may be more of an ideal investment that can be utilized in so many different ways that are completely up to you.
Not only will the investment be worth it if executed correctly, but the emotional dedication attached to it could pay off since land may be something worth holding on to for quite a long time.
Owner-Financed Realtors Looking Out for Your Best Interests
If you do ultimately decide to invest in property, look no further than contacting the Edinburg owner-financed realtors of Santa Cruz Properties. Now more than ever would be the right time to invest in one of our beautiful lots as we are only weeks away from closing out the 2010s!