Quora Question: Which Investment is More Stressful & Time-Consuming to Manage - a Property Portfolio or a Stock Portfolio?

The following is my answer to a Quora question: “Which investment is more stressful and time consuming to manage: a property portfolio or a stock portfolio?”

Most definitely a property portfolio.  The property portfolio is not as forgiving as a stock portfolio.  A stock portfolio is liquid.  When there are changes in the market, and you need to rebalance your portfolio, it is a simple matter of buying, selling and changing the weightage between debt and equity instruments and their derivatives.  Or, if you have a liquidity issues, you sell of what you need to convert it to cash.  There is a ready secondary market, and you can even make a small profit.  Fund movements in a stock portfolio has a low-cost barrier, unless you are over leveraged.

In a property portfolio, you are managing actual assets, not just numbers on a screen.  This means there is a cost to maintain all those properties, and that also means dealing with a variety of agencies.  Property is also subject to inclement weather, force majeur, and mishaps such as fires and floods.  All this either destroys or damages your property, lowering your yield and depreciating the asset considerably.  Property portfolios are not liquid.  What you have is what is.  You cannot quickly reposition your portfolio to take advantage of the market.  You have to make a projection and plan accordingly.  For example, you have a series of houses to rent.  But if there is a market for warehouses, you cannot get rid of the houses and buy warehouses just like that.  Transactions take time.

If there are cooling measures to dampen speculation, getting rid of your non-performing assets at even a cost suddenly becomes exponentially more difficult.  If you have property for rent, you must either deal direct with tenants, or hire an agency to do so.  If they are not paying rent, evictions are a cost, and you have lost rental.  Finally, while there are places that either have no capital gains tax, or mitigate it. But there is no place without a property tax.