{"id":716,"date":"2023-04-13T11:00:00","date_gmt":"2023-04-13T11:00:00","guid":{"rendered":"https:\/\/websitedemo.online\/HintInvestments\/?p=716"},"modified":"2023-06-16T11:04:41","modified_gmt":"2023-06-16T11:04:41","slug":"stocks-versus-real-estate-the-4-risks-you-need-to-know-before-you-invest-2","status":"publish","type":"post","link":"https:\/\/websitedemo.online\/HintInvestments\/stocks-versus-real-estate-the-4-risks-you-need-to-know-before-you-invest-2\/","title":{"rendered":"Stocks Versus Real Estate: The 4 Risks You Need To Know Before You Invest"},"content":{"rendered":"\n

Stocks Versus Real Estate: The 4 Risks You Need To Know Before You Invest<\/h2>\n\n\n\n

Any time \u201cinvesting\u201d is brought up, peoples\u2019 minds flash between images of Warren Buffet, memories of the Great Recession, and those #goals filed in their \u201csomeday\u201d folder.<\/p>\n\n\n\n

Unfortunately, 60 percent of Americans find investing to be scary or intimidating, <\/strong>according to a new independent market survey<\/a>.<\/p>\n\n\n\n

Alternatively, 60 percent also recognize that \u201csomeday\u201d they will need greater financial security <\/strong>than what they currently have.<\/strong><\/strong><\/p>\n\n\n\n

Too many people are putting off to tomorrow what they should be doing (or investing) today.<\/p>\n\n\n\n

For the next several minutes, set aside any preconceived notions you may have, and take an honest look at the risks associated with investing.<\/p>\n\n\n\n

Let\u2019s take a close look at investing in stocks versus real estate, the four basic risks of investing, how commercial multifamily real estate investments mitigate risk, and why the stock market can be much riskier than real estate.<\/p>\n\n\n\n

A Primer on Risk<\/h1>\n\n\n\n

As with any investment, there\u2019s an element of risk. Just as you could have been hit by a bus this morning, unexpected things come up in life, the stock market, and in real estate.<\/p>\n\n\n\n

The key is not <\/strong>to look for investments that are risk-free <\/strong>(that doesn\u2019t exist), but to understand the risks <\/strong>thoroughly, determine your threshold for risk, and ensure that you\u2019re doing everything you can to mitigate risk.<\/p>\n\n\n\n

Risk #1 \u2013 Consumer Behavior Could Change<\/h1>\n\n\n\n

Stock Market<\/h2>\n\n\n\n

Stock market investors bet on the success of companies who create products for people to use. Facebook, iPhones, Happy Meals, and soap are all consumable products.<\/p>\n\n\n\n

However, it\u2019s impossible to predict the term length of those products\u2019 and companies\u2019 popularity. Blockbuster had a long reign, but when technology and consumer behavior changed, the company stagnated, dragging<\/p>\n\n\n\n

investors down with it.<\/p>\n\n\n\n

Multifamily Real Estate Investments<\/h2>\n\n\n\n

When you invest in real estate, you\u2019re investing in a basic human need <\/strong>that will never go away: the need for shelter<\/strong>. As long as humans have existed, we\u2019ve required a roof over our heads, and that need has only strengthened over time, especially with rising population trends.<\/p>\n\n\n\n

Risk #2 \u2013 The Market Could Turn<\/h1>\n\n\n\n

Stock Market<\/h2>\n\n\n\n

One of the most common fears and possibly the biggest reason would-be investors remain on the sidelines is for fear of a sudden market correction<\/a>.<\/p>\n\n\n\n

During a downturn, investors may exit quickly (which only solidifies their<\/p>\n\n\n\n

losses). Others aim to accept short-term losses in exchange for long-term gains. Historically, the market bounces back, but clinging to that \u201ctrust\u201d is challenging during the downward trend.<\/p>\n\n\n\n

Multifamily Real Estate Investments<\/h2>\n\n\n\n

Recessions are actually good <\/strong>for commercial multifamily real estate investments, especially for workforce housing.<\/p>\n\n\n\n

In good times, incomes and savings rates are higher, which means more people tend to move up to class A (luxury) apartments.<\/p>\n\n\n\n

When faced with layoffs or pay cuts, homeowners may sell, and renters of class A apartments may downgrade to more affordable apartments (class B or C).<\/p>\n\n\n\n

Hence, during a recession, demand for apartments actually tends to go up, thereby decreasing the risk.<\/p>\n\n\n\n

Risk #3 \u2013 Competitors Could Come on the Market<\/h1>\n\n\n\n

Stock Market<\/h2>\n\n\n\n

When Netflix stormed the scene, they beat out Blockbuster because not only did they target the same audience, but they also got ahead of the technology and consumer trends.<\/p>\n\n\n\n

Consumers don\u2019t have insight into technology development or companies\u2019 operations. Thus, new competitors can have a significant impact on<\/p>\n\n\n\n

investment returns.<\/p>\n\n\n\n

Multifamily Real Estate Investments<\/h2>\n\n\n\n

Multifamily competitors don\u2019t just spring up out of nowhere, because space, zoning, and permits are limited. When new apartments are built, they\u2019re always class A (i.e. newer luxury tier) apartment buildings.<\/p>\n\n\n\n

Since the demand for workforce and affordable housing is on the rise, the risk of having high vacancy in well-maintained class B and C apartment buildings is fairly low.<\/p>\n\n\n\n

Risk #4 \u2013 Not Having Control and Transparency<\/h1>\n\n\n\n

Stock Market<\/h2>\n\n\n\n

Investing in stocks is like buying a train ticket. The train is leaving, with or without you. Whether you\u2019re on board or not is up to you.<\/p>\n\n\n\n

When the market is sailing upward, the ride is smooth and exciting. During a correction, a terrible, helpless feeling takes over. The conductor (CEO) is unreachable and you better buckle up.<\/p>\n\n\n\n

Multifamily Real Estate Investments<\/h2>\n\n\n\n

When you invest in a real estate syndication, you know exactly who the deal sponsor is, and you can reach out directly to ask questions and provide feedback.<\/p>\n\n\n\n

Further, when you invest in a solid syndication, you can be assured that there are multiple buffers in place to protect investor capital, such as reserves, insurance, and experienced professionals to handle the unexpected.<\/p>\n\n\n\n

Plus, with monthly and quarterly updates, you have ongoing transparency into each deal.<\/p>\n\n\n\n

Conclusion<\/h1>\n\n\n\n

There\u2019s certainly not one \u201cright\u201d way to invest. The key is to invest. Period.<\/p>\n\n\n\n

Understand the risks going in, and just do it. Because that money you see sitting in your savings account? It\u2019s losing value (because of inflation) with every passing second.<\/p>\n\n\n\n

Get out there, and start achieving your \u201csomeday\u201d today.<\/p>\n","protected":false},"excerpt":{"rendered":"

Stocks Versus Real Estate: The 4 Risks You Need To Know Before You Invest Any time \u201cinvesting\u201d is brought up, peoples\u2019 minds flash between images of Warren Buffet, memories of the Great Recession, and those #goals filed in their \u201csomeday\u201d folder. Unfortunately, 60 percent of Americans find investing to be scary or intimidating, according to […]<\/p>\n","protected":false},"author":1,"featured_media":720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/posts\/716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/comments?post=716"}],"version-history":[{"count":2,"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/posts\/716\/revisions"}],"predecessor-version":[{"id":723,"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/posts\/716\/revisions\/723"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/media\/720"}],"wp:attachment":[{"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/media?parent=716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/categories?post=716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/websitedemo.online\/HintInvestments\/wp-json\/wp\/v2\/tags?post=716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}