3 Reasons Why Real Estate Beats Stocks

Reasons Why Real Estate Beats Stocks with Doug Marshall – CREPN #47

J. Darrin Gross Podcast

There are many reasons investors choose real estate.  However, they may not know Three Reasons why Real Estate Beats Stocks.

 

Most investors can point to a handful of reasons they invest in real estate such as:

  1. Cash Flow – The positive cash flow from commercial real estate is a major advantage over owning stocks. .  
  2. Tax relief – The ability to defer capital gains through a 1031 exchange is not available in stocks.
  3. More Tax relief – Depreciation on commercial real estate works to reduce taxable income.   
  4. Leverage; The ability to acquire an appreciating asset with borrowed funds is unmatched in stocks.

I spoke with Doug Marshall of Marshall Commercial Funding to discuss some “Not So Common” reasons why Real Estate investing is more advantageous than stocks.

Real Estate vs Stocks

Three Uncommon Reasons why Real Estate Beats Stocks:

  1. The Commercial Real Estate Market is an inefficient market place.  Unlike the stock exchange, where the purchase price is the listed price, Real Estate allows for the buyer to enter into a purchase agreement and a negotiated price.  The buyer may have information that is not known to the seller, or that the seller has not yet acted on.  This can favor the buyer with the ability to increase the property value quickly.
  2. CRE owners have direct ability to influence on the outcome of their investments performance.
    • Make capital improvements to tired properties.
    • Change management for those properties that are poorly managed.
    • Re-tenant properties with better quality and higher paying tenants.  
  3. No more need for retirement calculators.  With Commercial Real Estate you can make a reasonable guess as to how much you’ll need to have accumulated in real estate in order to retire comfortably.  All you need to know are the answers to these four questions:
    1. How much annual income before tax do you need to retire comfortably?  
    2. How much annual income are you expecting to receive from Social Security?
    3. What is the current return on the equity you have in your Commercial Real Estate Investments?
    4. How much equity do you have in your CRE investments?

For more information, contact Doug Marshall at marshallcf.com.

To download the points discussed in greater detail, go to: http://marshallcfblog.com/3reasons

About the Author

J. Darrin Gross

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J. Darrin Gross is known to his clients & prospects as the most trusted insurance adviser for commercial real estate insurance. He is famous for helping apartment building and commercial property owners get high quality comprehensive protection at unbeatable rates. Download a free copy of the Real Estate Investors Guide to Commercial Insurance.