When people have extra money lying around, the first thing that comes to mind is trying to make more money from it, with investments being the safest bet. Investments are a way for people to improve their finances and set long-term monetary goals for themselves. But how do you know which investment market is the right one for your finances? There is no simple answer to this as there are many options in today’s day and age.
Traditionally, when one talks about investments, the first few options that pop up in their minds probably include stocks, mutual funds, ETF’s or commodities like metal (gold) or energy (oil). While these are great, a more reliable investment option is real estate. Real estate is not the first thing that comes to one’s mind when thinking about investments, as most people don’t consider it an investment; rather, they think of it as an asset. Under the right circumstances, real estate can prove to be a low-risk option with better returns in the long run. We’re listing out some of the pros and cons of both stocks and real estate, to help make your investment decision easier. Which is a better investment, stocks or real estate? Let’s dive deeper and take a look at an investment market analysis.
The Stock Market
Investing in real estate means that your money is highly liquid. This implies that your invested capital is not locked up for significant periods. Furthermore, stocks are comparatively less time-consuming. One can build their investment portfolio by investing in the stocks of multiple companies at a time without worrying about upkeep of any kind. Investing in stocks allows you to keep a watch on your investment in real-time when other platforms don’t offer that facility. The downside to such a type of investment is that there may be a possibility to pay capital sales tax when selling stocks. This market is also one that is extremely unstable in terms of prices. The stock market goes up and down at a much faster rate than real estate.
The Real Estate Market
The real estate market has two types of investments – residential property and commercial property investments. You could either purchase property at low rates, manage it and increase its value later, ultimately sell it at a profit (through a process called ‘flipping’), or invest in money-making (commercial) property and earn a steady income as rent. It truly is as simple as it reads, and this simplicity is a significant advantage of real estate. Furthermore, real estate investment protects from economic inflation, as land value and rent go up with inflation. The downside of real estate investment is that it involves time and effort from the investor, and once money has been invested, it’s not as easy to move money around as it is with other investment options, say stocks. Moreover, it requires larger amounts of money to be set aside as investments and hence is better suited for a slightly older and more experienced audience.
According to sources, when compared over ten years, returns from stocks are at an average of around 8%, while commercial properties are about 30%.
Still confused? Well, what if we told you that there is a way you can get both these investments in one? That’s where REITs come in. A REIT, or real estate investment trust, enables individual investors to buy shares of the REIT and add to their investment portfolio.
Whatever be your decision, we would highly suggest that before you make any investment decision, be sure to do your own research and consult with a financial advisor or investment advisor.
Legal Victories Unleash Potential to Cut Property Taxes - Impact on Hospitality and more
Real Estate Articles / Nov 15, 2023
Landmark Court Decisions Pave the Way for Lower Property Taxes and Intangible Asset Considerations
How you can profit from investing in Texas wetlands
Real Estate Articles / Dec 21, 2022
Wetlands are profitable investments if done right. Texas has multiple real estate investment options, including wetlands and you can get great returns on investment from them.
Transforming Houston: Council Greenlights Progressive Changes for Affordable Housing and Pedestrian
Real Estate Articles / Nov 23, 2023
Revolutionizing Houston\'s Housing Landscape: City Council Approves Sweeping Changes for Affordable Housing and Pedestrian Safety
Navigating Challenges in Affordable Housing Finance: Strategies for Developers
Real Estate Articles / Dec 08, 2023
Developers in the affordable housing sector face unprecedented challenges in financing that are primarily revolving around construction-related hurdles.
Houston is the best real estate market for industrial spaces in the country as of 2023
Real Estate Articles / Jul 25, 2023
Houston\'s industrial market has experienced impressive activity and has been recognized as the nation\'s top industrial market 2023.
Reviving Campus Spaces: Adaptive Reuse Solutions for Modern Education
Real Estate Articles / Jan 26, 2024
Transformative Real Estate: Navigating the Evolution of College Campuses through Adaptive Reuse and Strategic Solutions
Shopper & Consumer Trends Are Causing This Movement In Retail Real Estate
Real Estate Articles / Jun 19, 2023
The post-pandemic era brought several changes to the real estate market, specifically retail real estate and retail investment. Market trends for retail investment are on the rise. This is the right time to invest in real estate.
Revolutionizing Student Housing: Advancements in Development and Design
Real Estate Articles / Jan 17, 2024
Capital Market Challenges and Design Evolution in Student Housing Development: Navigating Financing Hurdles, Innovative Trends, and Future Prospects in 2024
Why Grocery-Anchored Real Estate Does Better!
Real Estate Articles / Feb 22, 2023
Grocery-anchored shopping centers are on the rise in the retail sector. They are the best investment in commercial real estate. It is low risk and long term.
The Ultimate List of Real Estate Terms
Real Estate Articles / Feb 25, 2022
We have compiled a list of top real estate words you need to know whether you are a real estate agent or are looking to buy a house or buy a commercial property. This is the real estate lingo you should know.
