Many investors have traditionally turned to the stock market as a place to put their investing monies. While stocks are a well-known investment option, not everyone knows that buying real estate is also considered an investment. Under the right circumstances, real estate offers an alternative that can be lower risk, yield better returns, and offer greater diversification.
Whether it’s planning for retirement, saving for a university fund, or earning residual income, you need an investment strategy that fits your budget and your needs. Comparing an investment in real estate to buying stocks is a good place to start.
Why Choose Real Estate over Stocks?
Investing in real estate or stocks is a personal choice that depends on your income, risk tolerance, goals, and investment style. It’s safe to assume that more people invest in the stock market, perhaps because it doesn’t take as much time or money to buy stocks. If you’re buying real estate, you’re going to have to save and put down a substantial amount of money.
When you buy stocks, you buy a tiny piece of that company. In general, you make money two ways: As the value of the company’s stock increases, the value of your investment goes up, too. And, depending on the company, you may receive regular dividends, which you can reinvest to grow your investment.
When you buy real estate, you acquire physical land or property. Most real estate investors make money by collecting rents (which can provide a steady income stream) and through appreciation, as the property’s value goes up. Also, since real estate can be leveraged, it’s possible to expand your holdings even if you can’t afford to pay cash outright.
For many prospective investors, real estate is appealing because it is a tangible asset that can be controlled, with the added benefit of diversification. Real estate investors who buy property own something concrete for which they can be accountable.
Whether you are a novice or experienced investor, Real Estate has always been considered to be one of the smartest ways to invest.
And with the current economic situation in the world, this is a better time to start investing in Real Estate.