Happy birthday!
Not your birthday?
Happy windfall then!
You’ve suddenly come into a large sum of money, and you know enough to know it wouldn’t be wise to spend it all. Sure, you’ll spend a little; maybe take a few friends on an all-expenses paid vacation out of the winter wonderland that is Washington DC; eliminate some debt; and with the rest, make a few smart investments.
But the thing is, you’re not sure if you should invest in the stock market, or in real estate. Each path to be taken has its advantages, and its drawbacks. As northern Virginia’s property management pros, it’s true that we might be a little biased, but read on.
Choosing stock market investment
Advantages
Liquidity: When you choose to invest in the stock market, you can withdraw your money at any time. Stocks are much more “liquid” than homes, as you never have to worry about negotiations or closing costs.
Passivity: Investing in stocks is relatively hands-off. You’ll never have to worry about mowing the lawn, or about having to field late-night phone calls from tenants with noise complaints, or plumbing emergencies.
Drawbacks
Hours of homework and research: In order to invest smart, you’ll have to spend a lot of time educating yourself on the ups and downs of the market, and analyzing stock. An expert you needn’t be, but a basic working knowledge of what you’re investing in will be necessary to making an informed decision.
Potential for huge losses: Do you remember 2008? The stock market plummeted, and investors watched, helpless, as half of their portfolios… vanished.
Choosing real estate investment
Advantages
Control: You have complete control over your investment. With best management practices, property improvements, and a firm grasp on the northern Virginia rental market, you can increase the value of your property — such control is impossible when you choose to invest in the stock market instead.
Supplemental income: Once a tenant takes up residence in your investment property, you can look forward to collecting a healthy sum of rent every month.
Drawbacks
Responsibility: An investment in real estate does necessitate more personal responsibility: You’ll have to perform maintenance, and regular upkeep. You’ll have to stage the property, and show the property, and oversee the process of leasing.
Unless you choose to hire a professional property management company (Might we suggest Real Property Management of Northern Virginia?) to take care of all that for you: And then, just like that, the real estate investment is just as hands off as stock market investment, and all the more lucrative.