Real Estate Investment Vs Stock Market Investment

Stock market and real estate, both are investment options available to choose from. Each has advantages and disadvantages associated with them.

One can choose an investment wisely in both or either for sizeable returns. Comparison of various attributes in both is discussed below:

Average return: Assessment made from the year 1978 to the year 2006 showed a 13.4 percent growth in stock markets and 8.6 percent in real estate. The stocks performed better in the growing market. The growth in real estate was consistent but slow and hence a lesser rise in its profits.

Working of investment: In stock market, the profit earned is directly dependent on the performance of the firm or company. Better the performance, higher the returns. If the economy performs well, the returns accrued will also be much higher.

In real estate, the profits get appreciated on a slow but progressive pace since the value of real estate always appreciates over a period of time. For steady returns, one can opt for renting or leasing the property. On a longer time span, one can purchase property when the prices are negotiable, and sell the same when the value appreciates.

Advantages: Some of the pluses of stock market are: stocks are easy to buy/sell, have good liquidity and flexibility. If the company’s performance is accompanied by well performing economy, the rate of the returns from stocks will be higher.

Investment in property has advantages like, tax benefits, continuous appreciation of land and property and consistent returns when it is rented. Better amenities, business or other facilities in the locality improve the property’s worth to a higher value in short time spans.

Leave a Reply

Your email address will not be published. Required fields are marked *