Real Estate vs Stocks: Where Should You Invest In

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Real Estate vs. Stocks Where Should You Invest In

Any seasoned businessman or investor will tell you that they made a fortune out of either real estate or stock. Both stocks and real estate provide enormous returns in due time. With the right approach, you can make a lot of money in both. However, which option should you go for: Real Estate vs Stocks? Let’s find out.

What Should You Invest In?

More than personal choice, investing in either real estate or stocks depends on a lot of factors; such as your investment cap, market condition, risk tolerance, etc. A lot of people prefer investing in the stock market – thinking of it as a risk-free investment.

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Buying stocks is essentially buying a tiny portion of that company. You make money as the value of the company’s stock improves. Another way you make money is by receiving dividends, usually at the end of each year.

Whereas in real estate, you purchase a piece of land or property and diversify your portfolio by selling them at the right price or by putting them up for rent – which will provide you a steady stream of revenue. The biggest advantage of investing in real estate is that you get complete control over your investment – as opposed to watching in silence from a distance in the case of stock.

Our Verdict

When all things considered, the real allure of real estate investing is its tangible nature. Individuals who invest in it know the benefits and tradeoffs. And, of course, we all know, the value of land never depreciates, and only spikes with time.

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On the downside, it is a huge risk of investing in real estate, and you need to have a lot of money to purchase a plot, house, or apartment. Moreover, the property market isn’t exactly liquid, and hence you cannot sell your properties on an immediate basis.

Real Estate vs Stocks

Let us look at the pros and cons of the real estate and the stock market.

Real Estate – Pros and Cons

Here is the list of some pros and cons of real estate investment that you should keep in mind while making a real estate investment.

Pros:

  1. Excellent Source of Passive Income
  2. Tax Benefits
  3. Diversification opportunities

Cons:

  1. Expensive and Liquid
  2. Appreciation Can Take Time

Real Estate vs Stocks

If you are thinking about investing in stock, then keep the following checkpoints in mind:

Pros:

  1. Highly Liquid
  2. Low Transaction Fee
  3. Minimum Risk

Cons:

  1. Volatility
  2. Low Returns
  3. Selling Stocks Trigger Taxes

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