What sets the wealthy apart from everyone else? They don’t save their money. They make their money work for them.

Real estate and the stock market are the two most common places people choose to invest their money.
While 401Ks and other employer-matched retirement programs are great, you must consider diversifying your investment portfolio in addition to traditional pathways to retirement. When you invest your money in the stock market or real estate, you allow your money to grow at a rate that outpaces traditional savings and provides an extra buffer to your existing retirement plan.
If you want to retire with more personal wealth and a healthy legacy to leave your family, the simple fact is you need to invest your money and put it to work for you.
But where should you invest your money?
Real estate and the stock market are the two most common places people choose to invest their money. Historically, both of these forms of investing have proven to grow at a much healthier rate than traditional savings accounts, and they each have distinct advantages and disadvantages.
This article examines the differences between investing in the stock market and multifamily real estate. It weighs out their pros and cons to help you determine the investment option that works best for you.
What is Stock Market Investing?
Essentially, purchasing a stock means you are buying a small piece of a company.
In this exchange, companies can sell small pieces of their business to investors to raise the capital needed to grow their business without taking on debt. In contrast, investors stand to gain money on their investment as the business grows and experiences more success. In an ideal scenario, everyone gains something out of the transaction. Look at the chart of any reputable company, and you will see that the long-term trend is significantly positive over time.
However, there is no crystal ball telling us which way a business will go, and there will always be a certain level of risk associated with investing in the stock market.
What is Multifamily Real Estate Investing?
If you invest with a multifamily real estate syndication, you are what is known as a ‘passive investor.’ This is because you do not take an active role in purchasing or managing a multifamily property.
Multifamily syndications are a great way for people to break into the real estate game without having to deal with many of the headaches associated with owning and managing a rental property. It is also an excellent option for seasoned real estate investors looking to step away from the extra responsibility while still enjoying the financial benefit. Passive investors simply provide the capital, while the syndicator does all the heavy lifting of bringing the project together.
Like the stock market, there is always a risk associated with investing. However, multifamily real estate is known to be an exceptionally sturdy investment, even in times of economic uncertainty.
The Pros and Cons of Investing in Stocks
Pros
- Easy to purchase
- You do not need a lot of money to begin
- Earn more as the economy grows
- Easy to liquidate
- Stay ahead of inflation
- Access to bigger deals
- Gateway to multi-family real estate
- More resistant to inflation
- Secure because rentals are always a need
- Start earning fast
- Part owner in a physical asset
- Help from industry experts
Cons
- It can be stressful when the market goes up and down
- If a company goes broke, common investors get paid last
- There is always a certain level of risk
- You must pay taxes on profitable stock sales
- The Pros and Cons of Investing in Multifamily Real Estate
- Less equity than with full ownership
- Profits are split
- Less control (passive role)
- Not a liquid investment
What Investment Option is Best for You?
If you are a low-risk, long-term investor, multi-family syndication may be the perfect fit for you.
While you can still invest in bonds or stocks that pay good dividends, a more conservative investor stands to gain a lot from being a passive investor in a syndication. This is because you get to leverage the expertise of industry professionals with minimal overhead and start seeing a quicker ROI than going into real estate on your own.
Another perk that often goes without mention is the freedom passive investing gives you to continue living your everyday life. Without the stress of dealing with contractors and tenants, you can cut past the headaches and simply enjoy the extra cash flow.
Ultimately, choosing the path that fits your lifestyle best is up to you.
Are you curious how investing in a multifamily syndication can help you grow your wealth?
Height Capital is a private equity investment firm that specializes in multi-family assets. If you are interested in learning more about our opportunities, we would love to chat with you and answer your questions!
Contact us today and take your first step into multi-family real estate.