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Where to Invest: Certificates or Real Estate?
For anyone new to the investment world or for any investment savvy people out there, one of the main questions people want to know is where to invest their money. Real estate investments appear to be the investment du jour. However, what about good ol’ fashion shock certificates? Since the market crash have they become a thing of the past? Or do certificates still hold valuable investment opportunity?
Let’s compare the trends and find out.
The Real Estate Investment Market
It seems like everywhere you turn someone is telling you how much money they have made simply by buying and selling real estate. Television shows are based on these investment strategies; books on the subject are flying off the shelves; and magazines are featuring multi-million dollar real estate investors.
Forbes.com reports that since 1999 the US real estate sales prices have increased by 56 percent. Furthermore, in the last 25 years, the real estate prices have increased by a whopping 247 percent. Now that’s something to get excited about.
However, there are certain risks involved when investing in real estate. For one, a house is not something to be taken lightly. It is a massive purchase. This is why you need to understand all aspects of real estate investment before trying your luck. You need to understand the cash flow analysis, the market value and the repair costs. You also need to know where to look, where to buy and where to sell. It’s a lot of hard work, and if you are not prepared for the many ups and downs, you could be in for a shock.
The Wave of Certificates
Since the recent market crash people have been extremely worried about their money. And why not? We are in a recession and this is reason enough to be afraid. However, historic trends have proven that what has fallen will indeed rise again. Experts suggest that the exchange will be back on its feet in no time.
In fact, in the last 25 years, according to Forbes.com, the S &P 500 has risen an incredible 1,000 percent. The 247 percent real estate increase isn’t look so amazing anymore.
Of course, this doesn’t mean you should run out to your broker and place all your money in certificates. It’s important to know what you are doing, no matter where you choose to invest your money.
There are investor specialists who handle both types of investments. Consider speaking to your financial advisor about which type of investment is the best for you. If you do not have a lot of money to throw around, perhaps s, or even mutual funds, would be best. However, if you are looking for a big-risk, big-cash flow investment, then consider the real estate market.
Whether you choose certificates or real estate investments, ensure you know what you stand to gain, and loose, before making any commitments.