Where to Invest: Why Investing in Real Estate is Better than Buying Stocks

Where to Invest: Why Investing in Real Estate is Better than Buying Stocks


It is important to overcome the barriers and cost to a new investor who is confronted with a decision between investing in real estates and stocks. Every option is accompanied by its advantages and drawbacks which depend on your financial needs, your attitude towards the risk, period of investment and time share. 

Financial Goals

As for decision-making between real estate and stocks, financial objectives are critical. Real estate on the other hand, might be more suitable if one’s goal is steady and constant increase of their investments in the share of long-term plans. Investments in properties such as rental buildings, or even offices and warehouses, pave way to consistent revenues in addition to possible appreciation of the property’s value.

However, if you want higher and potentially quicker gains and are prepared for the risks attached to them, the so-called risky stocks might tempt you more. The stock market can also provide very good potential for gains particularly provided your stocks are in the right growth industries or with excellent firms. But the stocks can similarly have high volatility in terms of their value within short periods, and this may not be suitable to all.

Risk Tolerance

One of the last differences between real estates and stocks depends on the risk tolerance level of a particular investor. Real estate can be relatively stable compared to stocks, despite adjustments. From the above points, one can deduce that property prices fluctuate less than the stock market and even if the market is in a slump, property prices remain more or less fixed. This stability in contrast to the more speculative investments the makes real estate a more conservative investment.

On the other hand, stocks are defined as the assets which fluctuation are much higher and this is the main reason why putting money into stocks is considered as a risky investment. It may be worth investing in stocks if you’re okay with fluctuations in stock market for possibly higher profits than fixed deposits because it comes with higher risks.

Evaluating Investment Tenure

Time span of your investment is also very significant while comparing real estates with stocks. Real estate investments are known to take a longer time before they can give good returns on investment. Purchasing properties, maintaining them, and waiting for them to appreciate could take a long time. Thus, if one is in search for long-term investments, then perhaps real estates will payoff.

Stocks, however, can generate high returns with in this duration provided the market situation prevails. On the flip side, the stock might be useful for you if you want fast profits and are ready to trace the tendencies in the market closely. You must always remember, however, that there is always a higher risk associated with it.

The Bottom Line

In the end, no two people have the same exact experience when it comes to debating the merits of real estate versus stocks. Hence, it should depend on the financial objectives of an individual, their appetite for risk, the duration for which money can be invested and time that one has to commit for managing investing activity. Consulting a financial advisor may also be useful in this case given that it is likely that the advice provided will be specific to your situation and needs.

If you have insights to share about investing in real estate or stocks, please consider the Write for Us Finance section to share your valuable perspectives