Not all investing has to do with stock. Though the usual financial advisor will talk about diversification, your options always seem to be various forms of securities such as stocks, bonds or mutual funds. Advisor's rarely mention investment property as an option, because its not something they can sell to you.

One thing you should consider is how the financial worlds views property as an investment, as compared to the stock market.

As an example, how much money would a bank loan you in a real estate transaction versus how much they would loan you for a similarly priced stock purchase? What would the rates be for such loans?

For a brokerage account, you can usually get a maximum margin loan of 50%. On the other hand, its common to get 80% or even more. Margin accounts can have interest rates more than 10%. A real estate mortgage would be under 6.5%. This is good evidence that the banking community also considers stocks to be a more risky investment than real estate.

Homes are seldom demolished, yet 80% of all companies go out of business in just 5 years. A piece of solid real estate is much more stable than an sort of stock portfolio. Especially since you can insure a property against nearly any unforeseen events to protect your assets. You can't go out and get stock insurance, can you? It's not complicated to see how much better an investment property is when it comes to risk management.

That doesn't mean you should sink all your money into real estate. Both the stock market and the real estate markets have their own swings in value, so the smart move is to keep money in both. That way you can take advantage of overall market situations in either case.

If you do decide to get into the business of investment rental properties, be prepared to do some research. There are many options, such as single family homes, duplexes, larger multi-unit apartments and even commercial real estate to choose from. Each one would have its own unique set of pros and cons.