How Best To Invest?
Real Estate vs. The Stock Market
By many metrics, the U.S. economy is doing extremely well as we move on from the worst of COVID. Nasdaq continues to hit record highs on the backs of tech-related stocks and futures. Houses continue to sell for $20,000 to $40,000 over asking price with increases in value of as high as 25% from a year ago (i.e. $400,000 up to $500,000). There’s no question that people with assets are making some serious money these days.
But big numbers alone don’t always indicate that now is the time to jump in as a potential investor. And they certainly don’t fully instruct on how or where to invest to maximize return and minimize risk. For those answers, you need to do your homework...and having a professional in your corner can make all the difference in the world. If you came out of the pandemic without any unfortunate surprises, you’re very likely in a great position to invest...or more accurately, to learn more about your options and the current market opportunities so you can then make the choice that will best solidify your future earning when the time is right.
There are some people who play stocks more aggressively, and with short term gains in mind. On the real estate side, this is best represented by people looking to buy homes and flip them for quick profit. If this is where your head is (looking for get rich quick strategies rather than investment advice), this article will not be of use to you, but we wish you luck. At Nexus Property Management®, we’re always thinking long term.
STOCKS: THE BASICS
Those who are bearish on the economy might often express it by saying that Wall Street is doing great, while Main Street is not [ How Nexus Supports Main Street ]. The idea is a simple one in that stocks and mutual funds are doing great but that doesn’t necessarily help people without any stakes in the game. For the majority of professionals, their exposure to the stock market is through their 401K plans or other employer created (and held) accounts geared toward retirement. With tax deferring incentives, this is a reliable play in terms of preparing for the long term...but more often than not, it is also tied to your place of employment, which can be very restricting for many, especially as you think in terms of where you plan to be in 10...20...30 years. There are also monetary limits and other penalties for accessing “your” money that may decrease overall flexibility. Nothing is without its risks, but investing in mutual funds and stocks with an eye toward the long term is a popular way to save for the future. Now, in the interest of doing your homework, let’s be sure to explore the other alternative.
Learn More: [ How To Achieve Financially Independence and Retire Early ]
REAL ESTATE: THE BASICS
In a way, similar criticism could be made of real estate. It may be true that not all people can own property [or so they might think], but all people can benefit from well-managed property and as a potential property owner your long term financial interests will align with what your tenants are looking for. They’ll subsequently show appreciation for this through long term tenancy with minimal issues, and for you that means reliable passive income. By its very nature, real estate investment is geared toward the future and is something that you yourself can fully control, rather than your employer or market forces.
What makes real estate investment especially flexible is that the money and the choices are in your hands. Yes, housing values will periodically fluctuate based on the market, but this won’t influence your management or returns until you decide to sell, (hopefully) many years down the road. Instead, you have ownership of a tangible thing that will always have value...and you only have to pay for 20%! In just a couple decades you could pay off the rest of an entire property, entirely through collected rents, and there’s a good chance that asset could double or triple in value in that time!
HOW BEST TO INVEST: GREG’S STORY
Greg Rice is the Vice President of Franchise Sales for Nexus. He’s been with the company since 2013 and prior to that had no experience in the real estate world. He’d worked for the state police, did some masonry here and there, and even DJed weddings and school dances. He was a bright, young guy with a grade-A work ethic who was looking for his niche, but just hadn’t quite found it yet. Then he was hired by Nexus as a leasing agent. From that lens he was able to learn the Nexus model and as he rose to become General Manager of the Pawtucket branch, he always advised clients and potential clients based on his experiences learning the trade. Since then, he’s helped countless property owners find wealth and success investing in local real estate.
With a newfound understanding and appreciation for real estate investment, Greg began buying properties for himself and by 2018 had over 30 units (at typical 3 units per building, that’s likely 10 apartment buildings). Three years later he owns over 80 rental units in Southern New England. The potential behind real estate became “what gets him up in the morning”. Each and every dollar he spends goes toward real estate. He has nothing in his 401K...nothing dedicated to stocks, bonds, or mutual funds. Greg is a true real estate purist...and his portfolio speaks for itself. Growth like his is what we work toward for all Nexus Property Management® clients.
[ Learn More: Real Estate Investment Is Recession-Proof ]
WHAT’S THE DIFFERENCE BETWEEN YOU AND GREG:
That’s an easy one...Greg has Nexus Property Management® managing all of his properties. There’s no way he could scale his investments to 80 units in just a handful of years without help from the most efficient professional property managers in New England.
Whether it’s 1 tenant or 1000, maintaining these properties, collecting rent, and making sure that everyone is happy (and therefore paying) is just a few clicks away when everything is automated with Nexus’s software [ How Nexus Back Office™ Makes Property Ownership Easy ]. From day one our goal has been to “connect [clients and tenants alike] to better living”. Greg has taken full advantage of those systems in place and his example is one that shows how realistic success in real estate investment can be when you take the right steps with the right partner.
[ Learn More: Hiring A Trustworthy Property Manager ]
If you’re interested in learning more about opportunities in real estate investment or have specific interest or questions about Nexus’ model, contact our team today! If you’re interested in learning more about our growing franchise and franchise opportunities you can reach us here.
[ Learn More: The Power of the Franchise ]
Mick Lefort is the Vice President of Operations for Nexus Property Management®. A National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.
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