Real Estate Investing versus other investments

Real Estate Investing compared with some alternatives

Exploring Diverse Investment Avenues: From Real Estate to Peer-to-Peer Lending

Investing is a crucial step towards achieving financial stability and growth. With various options available, it can be overwhelming to decide where to allocate your resources. Let’s explore some popular investment avenues, including real estate, real estate syndication, Airbnb investing, stocks, dividends, T-bills, money markets, and peer-to-peer lending.

Real Estate Investment

Real estate has long been a preferred investment choice due to its potential for steady cash flow and appreciation. Here are some ways to invest in real estate:

  • Residential Properties: Purchase homes, condos, or apartments to rent out. This provides a regular income stream and potential for property value appreciation.
  • Commercial Properties: Invest in office buildings, retail spaces, or industrial properties. These typically offer higher returns but come with greater risks and higher investment requirements.
  • REITs (Real Estate Investment Trusts): These are companies that own, operate, or finance income-generating real estate. Investing in REITs allows you to earn dividends without directly owning properties.

Real Estate Syndication

Real estate syndication involves pooling resources from multiple investors to purchase larger properties or projects that are typically out of reach for individual investors. Here’s how it works:

  • Pooling Funds: Investors collectively contribute capital to buy properties such as apartment complexes, commercial buildings, or development projects.
  • Professional Management: The syndication is usually managed by experienced sponsors or syndicators who handle the property’s day-to-day operations, making it a passive investment for the contributors.
  • Profit Sharing: Profits from the investment are distributed among the investors based on their contribution and the syndication agreement.

Airbnb Investing

Airbnb investing involves purchasing properties specifically to rent them out on short-term rental platforms like Airbnb. Here are some benefits and considerations:

  • Higher Income Potential: Short-term rentals can generate higher income compared to traditional long-term rentals, especially in high-demand tourist locations.
  • Flexibility: Owners can use the property for personal use when it’s not rented out.
  • Regulations and Management: Be aware of local regulations regarding short-term rentals and be prepared for the extra management effort involved in maintaining a successful Airbnb property.

Stock Market Investment

Investing in stocks allows you to buy shares of publicly traded companies. Here’s why it’s a popular choice:

  • Potential for High Returns: Stocks have historically offered higher returns compared to other asset classes, though they come with higher risks.
  • Dividend Income: Some stocks pay dividends, providing a regular income stream in addition to potential capital gains.
  • Diversification: By investing in a variety of stocks across different sectors, you can spread risk and increase potential returns.

Dividend Stocks

Dividend investing involves buying stocks that pay regular dividends. This strategy is popular for those seeking steady income. Key points include:

  • Regular Income: Dividends provide a reliable income source, which can be reinvested to purchase more shares or used as cash flow.
  • Stability: Companies that pay dividends are often well-established and financially stable, making them less volatile.

Treasury Bills (T-Bills) and interest income:

T-Bills are short-term government securities with maturities ranging from a few days to a year. They are considered one of the safest investments. Benefits include:

Money Market Funds

Money market funds are mutual funds that invest in short-term, high-quality securities. They offer:

  • Low Risk: Money market funds are considered low risk and aim to maintain a stable net asset value.
  • Liquidity: They provide easy access to your money, similar to a savings account.
  • Moderate Returns: While not as high-yielding as stocks, they offer better returns than traditional savings accounts.

Peer-to-Peer Lending

Peer-to-peer (P2P) lending platforms connect borrowers with individual investors. Investors can earn interest by lending money directly to borrowers. Key advantages and risks:

  • Higher Returns: P2P lending can offer higher returns compared to traditional savings accounts and bonds.
  • Diversification: By lending to multiple borrowers, you can spread risk across your portfolio.
  • Default Risk: There is a risk of borrowers defaulting on their loans, which can impact your returns.


Each investment option comes with its unique set of risks and rewards. Diversifying your investment portfolio across different asset classes can help manage risk and optimize returns. Whether you’re interested in the stability of real estate, the growth potential of stocks, or the income from dividends and P2P lending, there are numerous opportunities to grow your wealth and achieve your financial goals.

By exploring and understanding these diverse investment avenues, you can make informed decisions that align with your financial objectives and risk tolerance. Happy investing!

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Real Estate Analytical Review

Returns in the real estate investing market have been healthy over time as well. Twenty-year returns for commercial real estate outperform the S&P 500 index, although marginally, at 9.5%. Investors have seen even better returns on residential and diversified real estate investments, which average a 10.6% return. Of course, attractive returns lie ahead for intelligent investments, but significant cash flow, rising rents, and maybe most importantly, leverage are all major advantages for taking the real estate route.

Leverage, in real estate, is the investor’s option to easily obtain funding for investments, whereas, with other non-leverage type investments, an investor would put up 100% of the money for the investment. Leveraged investments allow you to pay a modest amount for the full investment. This separates real estate from most other investments, but as any investor knows, leverage carries the risk of a future inability to pay back the leveraged amount.

It should also be noted that investments in real estate carry certain tax benefits that stock market investing does not. Certain expenses may be deductible, and properties can, at times, be traded into other real estates to avoid capital gains taxes.

When investing in real estate directly, the investor has direct control over the asset that has been invested in. When investing in stocks, rarely does the investor have any control over the running of the individual business. With stocks, the investor is a silent partner, relying on the management of the company to increase the value of the investment. With real estate, while the returns may be slightly better over time, the more direct involvement of the investor is required.

Start with the 1% rule, read more here .

Buy property where you can rent for 1 % of the purchase price or better.  $1000 in rent = buying a property for less then $100,000 in Valu


Other investments may include:

  • Real estate syndication:A real estate syndication is a partnership between a group of investors pooling their resources into a single investment.
  • Hard money lending: Hard money loans, unlike traditional loans, are based on the collateral that secures the loan.  Typically are paid in full in 12-18 months or as short as 6 months.  They include points at the start and can involve penalties if not paid back at a given time.
  • ETF’s, bonds, money market funds, and mutual funds are typically low yielding but can be safe. 
  • Credit card debt and loans.  If you have credit card debt where you are paying 20%, that is the best investment you can make.  

Which Investment is Right for You?

As mentioned earlier, it cannot be said with conviction which strategy is best for you.  Of course, do your homework on the investment you are considering. Research on the decision to choose the path that is right for you. While one strategy may work for one investor, it may not work for another. We are all different with separate skillsets, so invest, but invest in what you are most interested in.

I invest in real estate and sell it. Call me for a conversation

Jay Bru


Real Estate Sales Scottsdale Arizona

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