As an investor, you must have multiple investments that range across different asset classes. All the options offer you a chance to maximize your return on investment, increase your cash flow, and possibly diversify your portfolio.
Two investment options, however, stand out from the rest, real estate and the stock market. Discussions and arguments have been held since time immemorial seeking to identify which is the better investment option.
To help you make the decision between these two asset classes, the team from Rent Smart USA has put together this article.
A Steady Flow of Income
Rental properties have the capacity of bringing you a consistent flow of rental income. And this doesn’t just apply to residential rental properties but also to commercial and retail. Provided you have a quality tenant leasing the space, you can stay at home and wait for the money to hit your account.
However, for you to enjoy a steady flow of income, the property must be well managed. Many property owners don’t have the time, resources, or experience. Quality management of the property will improve the tenant’s leasing experience and make it a no-brainer for them to extend the lease agreement.
For property management of your Orlando rental property, get in touch with the property professionals at Rent Smart USA.
Stock investments cannot boast of the same consistency in cash flow as real estate investments. Investors in stock enjoy returns either in form of dividends or the sale of their stocks once the price has increased substantially.
For most companies, dividends are released once a year which is a dull comparison to the monthly flow of rental income from a property.
Outsourcing the Management
As an investor, you are probably looking for an option in that you can hire a third-party company or firm to manage the investment. Both real estate and stock fit this criterion.
For rentals, you have property management companies and for stocks, you have mutual fund companies. It goes without saying that the companies will charge you a fee for the management.
Property management companies will be in charge of the daily operations of the company. They will maintain the property in good condition, collect rent, make sure all utilities are paid for, and also fill any possible vacancies.
When it comes to payment, management companies can charge you a percentage of the monthly rental income. The rental property can easily run itself and cover its own expenses.
A mutual fund management company will be in charge of analyzing the market, conducting research, and making key decisions on the ideal time to purchase more or sell the current stock.
Paying the fund investment manager can be difficult as the dividends come once a year and might not be able to cover the fund manager’s annual fee. You might have to dip into your pocket to cover expenses.
The above-mentioned fact makes real estate a better investment.
You should choose an investment that gives you peace of mind. One that offers a hedge against the economic volatilities of the market such as inflation. Property has served as a good hedge for landlords. When the cost of living increases, landlords are able to review their rent upwards and pass the added cost to the renter.
Stocks, on the other hand, are quite a volatile investment. It is a risky investment as the price can fluctuate in an instant. But as the economists put it, high risk, high return.
As the title suggests, this refers to the appreciation in the value of the asset over time. Let’s look at the two assets.
Real estate is founded on a finite resource, land. The population is on the rise, increasing the demand for serviced land near modern amenities and services. If you have invested in a prime location, you can expect the value of your property to appreciate over time.
There are a few factors that would lead to a natural appreciation in the value of stocks. It could be in the form of hiring a new CEO or the development of a niche product. These factors can be considered forced appreciation elements.
Have you made the exciting and smart decision to invest in Orlando real estate? Real estate promises stable income, an appreciation in value, and offers you tax deductions when tax season comes. However, it is not a walk in a park since you have to properly manage your property.
Don’t burden yourself with answering maintenance calls in the middle of the night, frequent inspections, and advertising the property. Rely on the experts from Rent Smart USA, the leading property management company in Orlando. We can take the weight off your shoulders and give you the chance to enjoy all the benefits of Orlando real estate.
Rent Smart USA has over 20 years of experience in the industry and is looking forward to offering your comprehensive property management solutions. Give us a call today.