In A Nutshell: It Depends Where You Are
If you’re the CEO of a company, and you’ve got a choice between investing in company stock or company real estate, even in this situation, what defines your decision will be the stock, or the real estate.
No, investment isn’t betting. But yes, it is betting. Even if you buy an excellent home in an excellent neighborhood and maintain it perfectly for fifty years, that’s no guarantee the government over the land where you bought the property will retain vitality, or the neighborhood, or the economy.
In 2008, a real estate bubble pulled the rug out from under millions of homeowners, and it was the government’s fault. In recent years, China has been buying up property across the world and sitting on it, facilitating synthetic bubbles that are now beginning to burst—this was, it seems, the aim of these investors.
Well, believe it or not, corporations are purchased and liquidated by bigger businesses for similar purposes. So, in a nutshell, when you’re considering shares VS property, it depends where you are, who you are, and what you’re investing in. Are you in a position where you know that the company in which you’re investing is poised to profitably expand?
What’s Your Position In Relation To The Investment?
Even if you’re the CEO of a business, it may not be an organization that’s on the edge of success. Big businesses get to a point where they may end up treading water for years before economically capsizing. If you’re a CEO in that position, perhaps your best investment choice would be property somewhere.
The key to either investment is time. The longer an investment is, the more chances there are for things to get in the way of your profit. Disasters, accidents, competition, sabotage, political intrigue, even drought—all these things can and often do influence the outcomes of even the most carefully made investments.
With property, what you want to do is invest in a building that’s in a place where the neighborhood is in a state that is reasonably predictable, the structure itself is in good shape, and you’ve got a plan. For example, you might buy an apartment building and turn it into a PIG, or Passive Income generator.
An Economic Projection Of Property
A six-unit structure can be purchased for around $500k, depending on the neighborhood and city—this is a no-starter in most of Southern California, but in the midwest, you can easily find a six-unit rental property for around $500k. Charge $750 a month per unit, you’re at $4,500 a month. That’s $54,000 a year. In under ten years, you’ve paid off the cost of the building.
If you were paying interest off yourself, at that point, you can sell the apartment building at a profit that’s essentially your original investment, and you’ll have doubled up. You spend $500k, earned $500k evening it out, then sold the property and doubled your investment.
If you’ve maintained the property, you may be able to sell it at a profit greater than the associated interest. The same kind of thinking can inform your purchase of a home.
If seeking company investment, you want a time limit of maturation in the investment you’ve made. There will be ebbs and flows, you’re seeking a general positive trend that can be relied on. The safe way to invest will involve sure bets that yield small returns which you can turn into other sure investments.
When you boil it down, determining which investments to make depends on associated properties or stocks, as well as investment time limits. Longer investments that are not liquid have greater risk. Shorter investments that have greater liquidity are more reliable, for the most part. Do your homework, and make some “practice” investments first to find your strid
