What's attractive about real estate?

Why would an individual choose to invest in real estate instead of something else like stocks or bonds, or start some other sort of company like a gas station? Here's a quick list of some of the things that characterize long-term real estate investing (flipping is a different beast all together). If some of these appeal to you then maybe real estate is right up your alley.

Real estate investing is:

  • Entrepreneurial - With stocks and bonds you just choose, buy and then watch things happen beyond your control. With real estate you are essentially creating a company that you can impact the success of. You have to deal with things like revenues, expenses, interviews (for tenants), contractors, accounting and the like. Being a land lord is being a businessman, which can appeal to a lot of people.
  • Income Generating - Land lording produces an income stream in the form of rental payments in addition to the appreciation of the house. This can be very attractive to people who are investing with goal of using some gains each year to cover running costs (like putting kids through college). With stocks or bonds you have to constantly be selling to meet those costs.
  • Off Hours - Unlike trying to open a retail store, most of the business transacted in real estate occurs outside of regular work hours. Since tenants, for the most part, tend to work the same hours you do, showing properties or dealing with problems tends to occur more often after five than during the day. If you work a regular job, this makes real estate investing a feasible business.
  • Not Correlated to Stocks and Bonds - Obviously, in the end all things are related (especially to the interest rates). But for the most part real estate is pretty separate from the stock market. Houses can go up in price when the market is booming and they can go up in price when the market is flat (and they can go down during both periods as well). So real estate is an attractive diversification strategy for many. Though I have yet to meet a successful land lord who didn't have a nice stock portfolio.
  • Long Term - In general real estate is a solid long term investment. When you get into real estate you typically stay in it for a while. For some people that's a major negative, but for others that's a very attractive characteristic. The money I have in real estate right now will be in real estate for some time, out of my reach. Even if I wanted it desperately it'd be weeks or months before I could get anything into my checking account. It's safe from any emotional decisions I could make (like letting my fiance talk me into spending some of it on our wedding).
Most (if not all) of those points should speak very strongly to you if you are considering real estate as an investment. For me personally, I tend to feel the strongest about the facts that real estate is entrepreneurial (I've learned an amazing amount about taxes and accounting since this began) and long-term.