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Reasons to Invest in Real Estate Versus Stocks

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2020-09-03 17:47:54 • Filed to: Real Estate • Proven solutions

If you invest in real estate or stocks or if you are thinking about doing so, there are several ways that you can expand your existing business or get off to a flying start. Alongside opportunities in the real estate industry, there are tools that allow you greater leverage than before, such as Buildium. However, you need to decide between investing in real estate vs stock market or strike a balance between the two forms of investment.

Historic and Current Position of Real Estate and Stock Value

Real estate and stock investment have historically proven to be among the top investments. While gold, oil and other valuable minerals serve as a lucrative investments, real estate in particular being a fixed asset tends to remain the most secure. Investors in general, tend to spread their investments over an array of profitable commodities, and so they may invest in gold and real estate or some lucrative resources such as oil.

invest in real estate or stocks

When it comes to property, perhaps, only some natural calamity may affect its value, such as an earthquake or depleted water resources.

Knowledge of the most and least valuable areas for real estate investment and stock investment has helped investors grow their wealth. Trends in this regard are most important, which is why you are likely to find particular area with the most expensive property. This is likely because of the idea of stability being reinforced over time, backed up by an increase in economic activity around that area, which increase the overall value. A case in point is London, which is among the most expensive cities to live in. Anyone who invests in London knows that the ROI is almost guaranteed. While purchasing property there may be costly, once you do so, renting it out over time will prove more than feasible.


Investing in Real Estate vs Stocks (Pros and Cons)

When investigating in the stock market vs real estate, you are likely to experience fluctuation with stocks much more than you will see this with real estate. However, some people who invest in real estate might choose to put their money into cement and other raw materials for construction. Investing in these commodities in the stock market may fluctuate, but there are trends that you need to keep your eyes open for. The dilemma that some people face concerning investment in real estate vs stocks can be addressed through the pros and cons below.

investing in real estate vs stocks

Stocks

Pros (stocks):

  • Stocks are liquid assets in the sense that they are easy to sell immediately when the market is open. If you need to sell them in an emergency, you can do that quite easily.
  • You can invest in multiple commodities. The investments are not as much as investing in real estate that requires larger sums. High returns on smaller investments.
  • Stock investments can be diversified.

Cons (stocks):

  • You do not have direct control over your assets
  • It's risky investing in one commodity that appears to be doing well.
  • It takes more time to understand stocks and the rules and regulations surround investment.
  • While trends can be a good pointer to help you with investment decisions, stocks are known to crash. It doesn't happen every other day, but it has happened. It must be realized that many stock investments are emotional ones. People often put their money where they see a trend increasing, but certain market triggers can cause people to rapidly pull out their money and sell their stocks in minutes. The value falls and those holding onto their stocks can lose a great deal.

Real Estate

Below are some points to consider when you consider investing in real estate vs stocks:

Pros (real estate):

  • It's a stable investment
  • Your investment can be insured
  • Real estate is likely to increase in value over time.
  • You can use it for a number of purposes:
    a.In a commercial or residential zone, renting it out is a good idea.
    b.You can sell it when the value goes up.

Cons (real estate):

  • Can be very costly to buy.
  • Real estate property value is largely stable. The real estate market through history has been the most stable, and it still experiences thousands of people putting their money in. However, in recent decades, unprecedented periods of massive slumps have occurred. The most recent example is the property market crash that took place in 2008. The cause mainly lies with supposed innovative schemes in mortgaging and refinancing that have been exposed to fraud practices. Over a period, these balloon out of proportion and destabilize the market.
  • It has to be managed and maintained.
  • Real estate is a secure and fixed asset. It is not easy to sell real estate on an immediate basis. Selling property involves several visits by a potential buyer who will investigate the premises. Additionally, the paperwork can take some time until finalised.

Leveraging Buildium - a Platform to Boost Your Presence and Operation in Real Estate

Buildium is a platform that gives you a voice and allows you to manage your real estate investment. When you register on this platform, you will be able to create a profile for yourself that gets you placed in a directory. Moreover, you can be connected with peers, like-minded people and clients who want to do business with you.

Try Buildium for Free >>>
real estate vs stocks

This platform is entirely compatible with real estate investment, as Buildium lets you manage each investment by tracking progress in a user-friendly way. Buildium falls under the banner of 'residential and association management software' which has an array of features that allow you to handle all your processes easily.

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Audrey Goodwin

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