Real Estate and Stock Market are the two eyes of investors. But how and why is Real Estate Better than Stock Market? There are a lot of reasons to it than meets the eye.
You might be a college student looking for a bit of side income. You might be just a person who is into the concept of passive income. Investing is thought of a good way to ensure passive income.
Whatever it may be, you need a solid investment strategy in order to meet the demands. The demand being the need of money or rather, the provision of a greater profit.
But the first thing coming to our mind on hearing the word investing is stock market investing. There are more than just one way to anything. The same applies for passive income in the form of investing.
You probably know you can profit a lot from Real Estate. But how much does this profit from Real Estate compare to the profit from Stock Market. Here are the reasons why Real Estate Might be better than Stock Market.
Stock Market and Real Estate might seem same to the naked eye. But they are the lot more different than you might expect. From outside, it might seem like buy, sell, repeat.
Here is where the “but” kicks in. There are a lot of factors separating Real Estate from stock market. But they can also be thought to be the essentially the same. Both of them have the same concept of buying and selling.
The main thing separating stock market from Real Estate is when the latter is done correctly, it can lead to better returns and also ensure a safer flow of money. Without further ado, the various things taken for comparison are given below.
What Is Stock Market
Here a simplified idea of the concept of stock market is given. Stock market refers to the buying, selling and insurance of shares of public companies. If you are to buy some shares in a particular company, you are a share holder.
But this totally depends upon you as a person, as an individual to invest upon. Be it stock market or Real Estate, you as an individual, your pocket money is what matters. Hence it is an incredibly personal choice you are making.
But the risk associated with Real Estate is on a lower scale. The most common reason people invest in stocks is because, there is little work or money associated with it. But with Real Estate, there is a boat load of work and money.
What Is Real Estate
Real Estate Investing is similar to Stock Market. But it is also very different at the same time. Investment in Real Estate refers to the process of investing your money in a physical property.
In Stock Market you will buy shares. In RE you will buy properties. A RE investment involves you investing all your money in a property. But What is a Real Estate?
A Real Estate refers to anything or a property, having a large number of buildings to stand on them. Even a small number such as three, can be considered as a Real Estate
Real Estate Vs Stock Market
The reason why most people go toward Stock Market is because it requires a less amount of time to invest in. But Real Estate is something you can make changes to. This is where RE differentiates itself from Stock Market.
A Vast Majority of the American Population have invested their money in stocks. It can be said to be a profitable venture for both the RE advisers and investors to take RE investing into consideration. Whatever is left untouched has to be exploited first to have the upper hand of.
Stock Market is something you cannot change. But for more experienced and potential investors, RE is something that is malleable. You can change it as you wish. You can take care of everything as you go. It promotes diversity and promotes a stable growth of income.
Something Stock market seldom gives is this advantage. But as it is with all things, there are some things associated with the investment of RE as well as Stock Market.
The Risks With Both Of Them
There are risks associated with any business. Be it RE or Stock Market. This risk is nothing but the potential loss you might face if you choose to invest in either one of the two areas.
Real Estate
In Real Estate, you will be able to see the appreciation you obtain from it. You can have a physical object to invest upon. This means you can have a surety of the place where your money is going.
The money you obtain from Real Estate cannot be as fluid as it seems with Stock Market. But it proves to be a viable source of Passive income. That way you can see a steady flow of income.
One of the main disadvantages in Real Estate investing is that RE’s cannot be sold as quickly as shares in Stock Market. You would also need to see if the deals are not all cashes in. Because you do not wish to be left stranded.
This is because once you invest in Real Estate, it is a long term investment. You cannot cash it out whenever you want nor can you see returns as soon as you invest in RE.
There are also costs involved in other expenses like the maintenance of the property and the up keep the infrastructure associated with it. RE cannot be trusted for Emergencies.
Stock Market
Stock Market cash are fluid when compared with RE. Most investors find Stock Market to be an appealing option to invest upon. Stock Market shares can be bought effortlessly and at the same time they can be sold in case of an emergency.
But they are volatile. You can never expect profit as you can expect from RE. This means that no matter how many shares you might have, you will have very little holdings.
Capital Gains Tax can also take up much of your invested money. While this money can be compensated in RE. In RE, the profit you take in increases as the popularity of the place increases.
The Extras To Cover
In Real Estate you cannot invest in bits. It is a total investment. You will be going all in if you are just starting out. Or you will be investing a portion of your wealth if your already a millionaire.
Cash obtained through stock market is volatile and is not suited for making easy money. Even if you do make money you will be left with meager return values. You might invest in a fortune but it might just wash away if not garnered properly.
Real Estate in the other hand is physical and it can be made to cover a whole lot of things. If you decide to rent the place, the rentals can be used to cover the mortgage, insurance and the property charges you might face.
This is leaving out all the additional profit you might incur from Real Estate.
The Finalized Solution!?
When it all comes down to it, both RE and Stock Market have a lot of risks and rewards associated with them. But in the end it all comes down to your personalized decision to invest in something.
Stock Market is more of a daily working and improving yourself option. While Real Estate is more of a retirement option where you want to live your life after doing all your work.
I hope you now know why Real Estate might be better than Stock Market. If you need anything just let me know and I will be more than happy to help you out.
Real Estate is better than stocks in the sense that stocks can go up and down depending on the status of the market. But Real estate, when done correctly can result in a steady growth of the individual’s value.
Of course! Real Estate is a great investment option. There are many niches out there and Real Estate is one of those niches that provides a constant passive income. It all depends upon the amount of research you put into it.
The Average Return on Investment is above 15%. A good ROI is anything above 12%
Real Estate, as hinted above is tangible. You will able to have a constant watch over it. There will be no such things as a fraud in Real Estate, when compared with stocks, which is tend to change and is volatile.