Real Estate Investing vs. Mutual Funds in Bryan College Station

Posted by Terrence Murphy Sr. on Thursday, February 21st, 2013 at 11:05am

Real Estate Investing vs. Mutual Funds In Bryan College Station

With the stock market fall of 2008, we have seen a shift in Texas for investors and their preference of where they invest their cash. For more reasons than I can list here, buying real estate as an investment really needs to be on your "learn to do list". I read a book called "Who Took My Money" by Robert Kiyosaki right around the time of the crash in the spring of 2008. Robert talked about the pros and cons of real estate investing.  The thing that really stood out to me were not all the pros, but that you need to study, learn, and become comfortable with any investment you decide to invest your hard earned money into. I wanted control. After 2008 and watching America's dollar value, 401k's, etc go down drastically, I wanted to be the navigator of my money's destiny. Mutual funds did not give me the tangible answer I was looking for.

But before we go forward, I want to go on record saying that there is nothing wrong with investing in stocks and bonds.  It's just important to make sure you thoroughly understand the risk and the gains in what you are investing your money in. Don't follow the path of America into the slaughter house with your money. Here is a quick comparison chart between Real Estate and Mutual Funds. Obviously, this can be debated, but at the end of the day these are serious factors to look at when deciding your investment vehicle:

Mutual Funds

Real Estate Investing

  • Use all of your own money to buy shares and never own 100%
  • Use OPM (leverage your cash and put a percentage down, but own 100% of the unit)
  • Bank will not loan money to purchase stocks
  • Bank is always looking for more real estate loans
  • No cash Flow (no solid stream of cash every month)
  • Cash Flow (every month like clock work you are seeing cash come in)
  • Give your money($) to someone else to control
  • Control your own money($) and others
  • Capital gain tax
  • No capital gain tax
  • No depreciation
  • Depreciation
  • Appreciation Velocity?
  • Appreciation ROI is exponential (equity build up is limitless)
  • Value could go down to zero (very volatile)
  • Never could go down to zero (also can be volatile at times, but cash flow covers that)
  • Hope management on your investment is good (lots of moving pieces and trust)
  • Can increase the value through good management and hands on approach
  • Pay a commission to someone when you buy
  • Get paid a commission when you buy
  • Not tangible
  • Can drive by it and see it when you get ready (tangible)
  • If it goes south no one will be to blame but the market
  • You can adjust the strategy and you are the driving force behind it
  • No pay off ever (No mortgage payoff)
  • Can be paid off and then you obtain mailbox money every month (solid retirement plan)
  • No Leverage at all
  • can leverage your cash to purchase more and leverage increases your cash on cash return

If you guys want more information on investing in real estate, contact a Realtor from TM5 Properties to walk you through the entire process. Also, check out our website for the latest properties that hit the market in Bryan/College Station. 


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