Stocks vs Real Estate

Just got back from the real estate business seminar. I must admit that real estate industry is not what I thought it was. More than anything, its all hard work. And for me to start a new business for part time in real estate is something that will not be possible. This kind of business needs and deserves your full attention because of the underlying processes that needs to be accomplished.

When I got back home, I started to compare Stocks vs Real Estate. The main points and probably the decision maker for me is the capitalization. In stocks, your capital can be any amount of money that you are willing to invest. In real estate, you need almost always around P1M to risk the money in this venture. And P1M is not little in our country. Stocks win.

Second point, that I probably like in favor of stocks is that, stocks don't need a lot of people to do business. You just need a broker and you can transact easily. In real estate, there are a lot of people involved. Engineers, contractors, lawyers, accountants, brokers and most especially, the government, bribes for government employees are there to take part in your profits. I don't want to talk to a lot of people when doing business. And don't have much patience in managing tenants for rental properties as well. So I think that stocks win (for me) in this category for a lot less hassle in doing business.

Third, Stocks are liquid. Real estates are not. It takes you an instant to sell a stock of a company and takes your 3 - 6 months to sell a real estate. Stocks win.

Fourth, stocks are almost always valued at the right price. There are some companies that are under valued and will adjust accordingly overtime. But since it is public, there not that many opportunities to spot undervalued stocks to gain more than 200% in profit for a particular stock. But this depends entirely on the investor's skill to spot these opportunities.. Most of the time, prices will adjust accordingly. In real estate, pricing can be lucrative. In a way, it is a good thing because you can get away even with a 200% profit, but this is also less frequent. Real estate's gain can be lucrative and depends entirely on its marketing. Both win.

I think there is an obvious winner here for me. In starting a new business part time, I think real estate won't be that viable. And in terms of investing. I think stocks wins over real estate in my personal objective. But! I still think I will use the things that I learned in the seminar. To invest in real estate. Its just that, the capitalization is too much for the returns that is comparable to stock. And I believe that I'll be buying lots only real estate until I know more about building and developing the land.