| When the stock market crisis began in 2008, one | | | | SECURITY OF CAPITAL |
| of the reasons operators sited then was | | | | Whatever your intention, the first thing to |
| investors shift of focus to the real estate sector. | | | | consider is the safety of the capital to be |
| The explanation then was that many investors | | | | invested. Any investment that does not |
| who made money during the stock market boom | | | | guarantee the recovery of the capital invested is |
| divested from the stock market and were | | | | not worth considering at all. When you relate this |
| investing in real estate. | | | | to stocks and investing in buying buildings, to a |
| Apart from individuals, most corporate | | | | large extent capital investment in land and buildings |
| organizations joined the race to invest in | | | | are more secured than stocks. Except in the case |
| properties and sell later. However, the property | | | | of war or natural disasters, an investor can |
| sector suffered weak demands too as the global | | | | guarantee the safety of his or her investment in |
| economic crises worsened. | | | | properties by taking out an insurance policy. Hence |
| Like the stock market, many investors both | | | | in the invent of fire or other agents of |
| corporate and individuals had their fingers burnt | | | | destruction, you can always recoup your loses |
| and suffered huge losses. But the negative | | | | from the insurer. But investments in stocks can |
| experiences in both markets - stock and real | | | | vanish in one day if for instance the stock market |
| estate- will not stop people from investing. | | | | crashes or the company fails. |
| Already the stock market is showing signs of | | | | CAPITAL APPRECIATION |
| recovery due to increased investor confidence. | | | | The second point to consider is the issue of |
| Despite this, many investors who are liquid are still | | | | capital appreciation. It is known that except in rare |
| contemplating on where to invest - stock or | | | | cases of war or natural disasters, land and building |
| properties. | | | | values are always on the increase, even if |
| In the opinion of leading investment experts, both | | | | marginal. |
| markets are good but the investment objectives | | | | SECURITY AND REGULARITY OF INCOME |
| and ones sources of income will determine ones | | | | In most cases, the major reason for investment |
| choice. Another investment consultant concurred, | | | | is the expectation of income from the |
| saying that the choice of any form of investment | | | | investment. In this regard, dividends are expected |
| will depend on many factors. | | | | from investments in stocks and rents from |
| Real Estate Versus Investment, Which Way To | | | | investments in land and buildings. However, while it |
| Go? has been a raging question for long. First will | | | | is certain that rent will be paid on your property |
| be the motive or intention of the investor. Is it | | | | [barring a bad defaulting tenant] you can never be |
| for a short term or long term> Is the investor | | | | sure that dividends will be paid on your stocks. |
| interested in capital returns or in streaks of | | | | Many companies has not paid dividends to their |
| returns in form of regular income? Is it an | | | | share holders for many years. More over, you |
| investment to be left for ones children in death? | | | | can never know how much that can acrue to you |
| The answers to these questions among many | | | | as dividends from stock investment until they are |
| others will set the tone for the rest of the | | | | paid. One year it may be $0.20, the next it may |
| investment decisions that will follow. | | | | $0.10. It is difficult to plan on such irregular source |
| If one is only interested in short term investment | | | | of income. Regarding income from real estate, |
| of funds that are not needed immediately but | | | | except the unusual happens, you will know your |
| may be required in a short while - say in two to | | | | rent at the beginning of the year or term of the |
| five years, buying stock may be more preferable | | | | lease. In some cases, the rent is even paid in |
| than real estate. This is because it is easier to | | | | advance. |
| convert stocks to cash than buildings. However, | | | | We have made a fair attempt at answering the |
| beyond this simple reason, is necessary to | | | | question, Real Estate versus Stock Investment |
| examine the principles of investment and apply | | | | Investment, Which Way To Go? I hope you |
| the different tests to both stocks and land | | | | found it useful enough as a guide to profitable |
| properties before concluding on which one is more | | | | investment decisions. |
| suitable in any particular case. | | | | |