Deciding Which Is The Better Investment Between Real Estate And Stocks Comparison Of Real Estate vs. Stocks
We have heard over the years heated debates regarding which is a more viable investment choice when it comes to real estate and stocks. It is not easy to give a definite answer to this question since it boils down to style, personality and preferences. In short you need to take into consideration the specifics of the individual investments.
The concept of real investment involves dealing in physical land or property. You will need to expend money on a monthly basis as long as you have interest in particular real estate. Conversely your investment in other type of real estate will create an income stream for you.
Investment in stocks means that you are buying a portion of a company. If there is any profit accrued from the trading activities of a company you get a portion of it. The Board of Directors watch over your investment and gets to decide what is paid out as dividends after reinvesting a level of the profit back into the business for expansion purposes.
The tendency of people in the lower and middle classes to lean towards real estate investment is higher. Why this is so is because they are familiar with it as they grew exposed to it. They also heard their parents discussing the prospects of investing in real estate.
A lot of people opt for real estate investments as they can see the tangible thing where their money is. Psychologically this is important to a lot of the investors. Since they can look and feel their investments makes them more comfortable.
The possibility of being defrauded in a real estate transaction are lower. You can physically show up at an investment in order to inspect it. This is unlike in stocks where you have to trust the management and auditors.
On the other hand, you need a lot of hands-on work in case of real estate investment. Even where you hire a property manager, there will be need for occasion meetings and oversight.
Investing in stocks gives you the opportunity to benefit from a great wealth creator. Since you are purchasing a part of a business in stocks investing, this is considered as higher level of asset ownership.
You will be impressed with the ease with which you can diversify in stocks in a way that is less expensive. Doing so in real estate is resource intensive.
Investors in stocks tend to have an emotional and undisciplined attitude which leads them to lose in their investments. Most losses in the stock market can be attributed to psychological reasons.
The price of stocks often fluctuates in extreme proportions. Compared to real estate there is higher volatility in stock market.
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