Real estate can be a great option for capital returns in different ways. These include tax advantages, capital gains from property below market value, and rental income.
However, it is not for everyone. It takes confidence and time to learn for competently investing. Moreover, it takes effort and perseverance to find awesome deals.
Not only this but financial discipline is also needed. Let’s admit it. Investing in the stock market is less stressful! There are a lot of stock market investment options. Moreover, to serve you better, there are many online platforms like Betterment.
However, I still found real estate investment to be more beneficial. It gets you higher returns. Moreover, offers unique qualities that attract many.
Here are the reasons why real estate is better than stock investments
Provides cash flows and is a hedge against inflation
Hear a lot of people saying “Cash is king?” It doesn’t matter where you invest. You want returns that you can save up for your retirement or reinvest. Renting your properties gives you a constant source of cash.
However, buying the right property is the key!
What’s the biggest benefit you ask? Buying a property makes you kind of immune to inflation! However, this is mostly for rentals as it keeps a steady cash flow.
A market where you can buy cheap and sell expensive
Everyone knows that you can buy low and sell high in the stock market! However, it is not possible for all investors to do the same consistently. Institutional buyers always have more leverage as compared to individual investors.
In the stock market, things can be changed easily by investors. In real estate, however, you can always look for buying low, and deals. There are also strategies that you can use for buying low and selling high after you rehab a house.
Low risks and is actively managed
The value of the stock market keeps on going up and down. Moreover, there is a tendency that individual investors buy at the wrong time.
However, with real estate, there is no emotional selling or buying. Panic selling is close to impossible.
There is a rise in the prices of rents and properties as inflation increases. Furthermore, the risk of losses goes down after holding property for a longer period of time.
This is not the same as the stock market. The risk stays the same no matter what.
Provides advantages with tax
What property investors love? There is absolutely no depreciation!
Depreciation is when an asset becomes obsolete or wears out. However, with property, the value tends to go high. This means you can get a tax credit on the value going up.
Depreciation is already on top of the property upkeep. Tax deductions take place when you take it which lessens the tax liability. This means more money for you to use in your investment!
The Final Comparison
Although the stock market is still one of the widely used platforms for investment, real estate still beats it. As said by DiversyFund “For over 30 years, real estate beat the stock market by a significant margin with less daily volatility.”
There are many options available in the market. One of them is DiversyFund which claims to maximize your earnings.
However, you can’t just go out and buy a property. It is important that you buy one below the market value. Putting time and effort is the key to complete research of the property you are going to buy.
The deals made in real estate have performed better for years as compared to stock market investments ever made.
Read also Real Estate Investment Guide: When and When Not to Buy and How can Beginners Start investing in Stocks?
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