Technology companies have exploded in popularity ever since computers became a household item. Due to its seemingly exponential growth, the tech industry has become one of the most popular ways to invest your money. However, there are a number of reasons why good old-fashioned real estate is a better way to spend your wealth.
Gadgets Come and Go, but People Always Need Roofs over Their Heads
Publicly-traded companies constantly rise and fall, and technology companies are especially notorious for being volatile. A multi-billion dollar tech company may be on top of the world one day, making it seem like a smart investment. Then suddenly a new gadget comes out of left field and puts them out of business.
Just take BlackBerry for example. Up until roughly ten years ago it was the king of the smartphone market with a marketshare over 50 percent. Considering how much the smartphone market has skyrocketed over the last decade, BlackBerry would have seemed like an extremely smart investment back in the day. However, along came Apple's iOS devices and Google's Android devices. Nowadays BlackBerry has less than a 1-percent share of the smartphone market.
Unlike tech companies, there's no chance that your property will become obsolete. Your house will never declare bankruptcy and disappear. Real estate prices certainly aren't immune to fluctuating in value along with the rest of the market. However, no matter what state the economy is in, people are always going to need a place to live. If you buy property, you can rest assured that it will be inherently valuable until the end of civilization.
They Don't Make Land Anymore
Tech companies are constantly developing and releasing new gadgets. Sometimes their products are a hit and their value skyrockets. Other times they completely miss the mark and the company's stock price plummets. In the tech world, there's only one certainty: a new gadget is always right around the corner.
That isn't the case when it comes to real estate. The world is a finite place, and there aren't any companies out there producing new land. When you invest your money in property, you get to own something that's permanent. Even if the value of your land fluctuates up and down, it will never be totally replaced with next year's model.
Your Property Can Be a Reliable Source of Passive Income
When you invest in tech companies, the value of your investment is subjected to the whims of the market. If you want to turn that investment into a steady stream of income, you can potentially lose a ton of money when the market takes a turn for the worse. Recessions can last for years, yet you can't wait around for the market to recover if you're depending on money from your investments to make ends meet. If the recession is severe enough, you'll actually be losing wealth every time you make a withdraw compared to your initial investment.
In contrast, if you own multiple real estate properties, you can reliably generate passive income by renting them out to tenants. The best part is that, unlike withdrawing from a stock portfolio, the money you make from renting won't diminish the value of your investment. You can make passive income off of your properties for decades while still retaining the initial value of your investment.
In fact, property values tend to substantially increase over time. If you invest smartly with the help of a real estate service, you can sell your properties for substantially more than you initially paid for them when you want to retire. All of the income you received through renting over the years will essentially be free money.