No just anyone can go buy an apartment deal. Schwab or Fidelity will let even an idiot buy a stock, but to find a property, get funding, and manage it requires an experienced investor resume, liquidity, property management skills and more work, which reduces the buyer pool. Here are four reasons why investing time in understanding real estate will reap more investment benefits for you in the long run.

  1. Leverage

Because apartments provide dependable income, an investor can use $250,000 to buy $1,000,000 worth of cash-positive real estate. Stock investors cannot and should not use leverage when buying stocks. Leverage is the ultimate way to create wealth and in the case of apartment debt, unlike homeowner or consumer (bad) debt, the tenants pay off the mortgage over time.

  1. Depreciation

It is no secret that real estate offers the last refuge for tax writeoffs. In one year, employing bonus depreciation laws, we can often write off 24 percent of the real property value against other investment income. This is a tremendous advantage over stocks for high earners.

  1. Dependable Cashflow

With banks paying people with savings accounts just over zero interest (.18 percent) and dividend yields of the onceclassic dividend stocks being terminated or cut to almost nothing (GE, Disney, etc.) real estate offers consistent cashflow at 5-7 percent annualized, which is about 50 times what banks are paying on a savings account right now.

  1. Durability

Technology is killing off companies. While the average company in America used to have a lifespan of 60 years, these days it is not uncommon to see a highflyer disappear in a flash. Large apartment complexes can produce income for decades and are very difficult to replace due to regulations and their cost to rebuild. While the media pours attention on the high-flyers, the reality is that the stock market has more losers than winners; GE was delisted from S&P, Lehman almost took the world down. Remember Blockbuster, Eastman Kodak, and Victoria’s Secret? It seems the airlines file bankruptcy every ten years or so. Ford and GM are both operating at a fraction of their all-time high. Meanwhile, apartments in cities across America continue to provide cashflow and appreciate in value through both good times and bad times.

The negatives of apartments versus stocks are you have to know what you’re doing as an investor. Also, the real estate investment is not as liquid. While one stock can trade a million shares in a minute, an apartment with longterm debt won’t trade for years.

Maybe that’s why they last longer.

  • Grant Cardone

    Grant Cardone owns and operates seven privately held companies, and a private equity real estate firm, Cardone Capital, with a multifamily portfolio of assets worth over $3.6 Billion. He is one of the Top Crowdfunders in the world, raising over $740 million in equity via social media. He is featured on Season 2 of Discovery Channel's Undercover Billionaire, where he takes on the challenge of building a million dollar business in 90 days. Grant is also a New York Times bestselling author of 11 business books, including The 10X Rule, which led to Cardone establishing the 10X Global Movement and the 10X Growth Conference, now the largest business and entrepreneur conference in the world. The online business and sales educational platforms he created serve over 350,000 individuals and Forbes 100 clients throughout the world. Voted the top Marketing Influencer to watch by Forbes, Cardone uses his massive 15 million plus following to give back via his Grant Cardone Foundation, a non-profit organization dedicated to mentoring underprivileged and troubled youth in financial literacy.

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