Why Real Estate is Better Than Stocks
Stocks are a straightforward, no-fuss investment strategy for putting money away for the future. However, the stock market has inherent risks that can put investors at a significant disadvantage compared to real estate investing. Learn why property investing is the best strategy for building long-term wealth.
Real Estate vs. Stocks: Which Is the Better Investment?
Many Americans diversify by investing in real estate and the stock market. The U.S. Census Bureau reports that 65% of residential properties are owner-occupied, and 55% of U.S. citizens contribute to an employer’s retirement plan, which is usually in stocks or a mutual fund.
Diversifying your investments is sound advice, but If you want to get the best performance out of your investment dollar, you should know where to focus your efforts to maximize your gains.
Real Estate Investment Advantages
Even though buying and selling real estate is a complex and legally intensive task, professionals handle the most challenging parts of the job. Most investors only need to focus on finding the right property at the right price, holding it for the long term, and selling it for a higher price after enjoying years of tax concessions and rental income.
There are always going to be maintenance and tenancy issues, but even here, a good property manager can all but make your property investment a passive one.
For the most part, property prices tend to keep pace with inflation, ensuring they grow in value from one decade to the next. Property investment also delivers tax advantages, with deprecation, wear and tear, and other property ownership costs reducing your tax responsibilities. In contrast, dividend income from stocks will increase the tax you need to pay, even if their current market value is less than what you paid come tax time.
Stock Investing Disadvantages
Stock investments are easy to liquidate and diversify, but these advantages come at a cost.
Stock prices follow the mood of the market. A panicked market can bring prices crashing down to wipe out your capital gains, even though you may have been holding the stock for decades.
During periods of economic unrest, stock owners are always the first to feel the pain. Should companies you have invested in go bankrupt, it can wipe out the entire value of those stocks, with no hope of recovery.
Real estate is unlikely to suffer the same fate because everybody needs a roof over their head, regardless of the state of the market.
The extra liquidity of stocks means it’s easy to sell on an emotional whim when the most sensible strategy would be to hold for a more market correction. It takes more effort to sell a house, making it almost impossible to offload it in a panic.
Real estate investing is unmatched in flexibility, tax incentives, and income production if you are researching strategies to diversify your investments away from stocks. While finding a property with potential can be challenging, partnering with the right team can ensure the security of your financial future with professional advice and guidance on every aspect of property investing.
Lea and Lefry Amarille are real estate investors. They have been actively involved in the GTA and Durham Regio for a number of years. Their mission is to provide great quality homes for tenants, while at the same time providing an above-average return on investment (R.O.I) for their investor partners and themselves. It is truly a win-win-win way of investing! Lea and Lefry offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact Lea and Lefry. For more information about Lea and Lefry and their investment program,
please call (416) 827-0586 or visit https://investorleaandlef.com/