I have thought of this analogy yesterday and would like to share with you.

Let’s step back in time to 30 years ago in your neighborhood. If you would have bought “any” house for investment back then, wouldn’t it be a very good investment by now? Last year my parents sold their house in vancouver for $670,000. The same house was built for less than $40,000 back when 30 years ago. That’s about 2650% return. But the most amazing thing about real estate is the powerful “any”. You can buy “any” house back then and it will be a good investment.

What about stock? Yes, you can buy good stocks like coca cola. But how many companies that were big back then are still big now? Not a whole lot.

Here is the fundamental difference, a stock, or a company, needs to face many unknown risks and needs to be able to adapt to the market changes in order to be “possibly” successful for long time. That’s why there aren’t many stocks that does well and continues for a long time. But for real estate, a house is a house, it’s like that 30 years ago, and will continue to be like that unless you change the layout. Also, you can always insure your property against possible damages like fire, flood, or earthquakes.

But try talking to an insurance agent to insure your stock value, see what they will say to you.

Tags: cashflow, cashflow properties, cashflow propertys, real estate investment, stock