Stock or Real Estate: Which Is Best?
Updated: May 22
The stock market has traditionally been a popular investment option for many investors. Although buying real estate is also regarded as an investment, not everyone is aware that real estate is a well-known investment option. Real estate investment can be a safer, more profitable, and more diverse investment option than stocks when the right conditions are present.
Investing in stocks or real estate (for example, multifamily investment in Houston, Texas is a personal choice based on your goals, investment style, risk tolerance, and financial situation. Stocks and real estate have distinct dangers and opportunities. Real estate typically requires more money and time because it is not as flexible as stocks. However, it does offer the possibility of substantial appreciation, as well as a stream of passive income. Stocks have market, economic, and inflationary risks, but they don't need a lot of money and can usually be bought and sold easily. Real Estate Pros
· Rent Growth- Appreciation
· Forced Appreciation
· Cash Flow
· Tax Advantages/ Depreciation
· Net Operating Income Growth
· Leverage financed for real estate
Real Estate Cons - More work than buying stocks - Expensive and illiquid - High transaction costs
- Highly liquid
- Easy to diversify
- Low transaction fees
- Easy to add to tax-advantaged retirement accounts
- More volatile than real estate
- Selling stocks can trigger big taxes
- Some stocks move sideways for years
- Potential for emotion-driven investing
Keep in mind that many investors invest in both real estate and the stock market. A REIT might also be worth a second look if you like the idea of investing in real estate but don't want to own and manage properties.
Makaan Investment Group can help you create better decisions and strategies for your investment goals. To learn more about how you can create passive investment in Texas, dial 281-500-8554.