Why You Should Choose Real Estate Investment Over Stocks
When planning to invest, most people find themselves in a dilemma – real estate investment or stocks? While both are great ways to multiply your capital, investing in real estate is far more rewarding than the stock market. Here’s why:
You Have More Control Over Your Profits
Investors in the stock market make money by buying when stock prices are low and selling when they are high. It’s almost impossible to do this consistently. It’s difficult to know everything about the company you bought stocks in and the industry it operates within. If the industry takes a hit, it’s likely the stock price does too, and the value of your investment falls.
With real estate investment, however, individual properties can be vastly different in size, location, features, and price. There is not a fixed market for the property you’re planning to buy or sell. For example, you can buy an old property at a low price then revamp and sell it for substantial profit.
In other words, you have more control over your profits when investing in real estate than when investing in stocks.
Real Estate Investment Provides Consistent Cash Flow
When you invest in stocks, sometimes you win, sometimes you lose. There is no guarantee you will make the same amount you made last month this month or the next. It all depends on company performance, interest rates, inflation, and many other relevant factors.
In contrast, real estate can provide a source of consistent cash flow. If you have a property, you can rent it out and receive monthly payments from your tenants. Along with that, the market prices for rental properties keep pace with inflation. You will earn a higher rental income when the cost of living increases.
Your investments should be giving you a steady income that you can save or use to reinvest. Real estate investment provides you with precisely that.
You Can Enjoy Unique Tax Benefits
A depreciation expense is one of the most beneficial tax advantages real estate investors enjoy. It legally allows for a tax reduction that benefits investors by giving them extra money. They can use these funds to save, reinvest, pay back loans, or spend on anything they want.
Before Investing in Real Estate
While real estate investment is good, you cannot just go out and buy any property. It’s important to put in the time and effort to find deals and perform thorough due diligence. It’s common for sellers to overestimate the price of their properties without taking into account the state of the property. Doing detailed research on the property as well as its developers is essential during the negotiation process. As an investor, it’s crucial to buy below the market value to make the most out of your investment. Whether you purchase a small commercial space or a luxurious penthouse, be smart and strategic!
-Andres Pira
About Andres Pira – philanthropist, real estate tycoon, author, speaker, and global citizen. Andres Pira enjoys living in Thailand where his journey began from ไม่มีที่อยู่อาศัยให้กับมหาเศรษฐี.
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That’s a good idea to make sure that you are making a good investment before you buy a property. I would think that it would be tough to get a house in an area that no one wants to live, or one that has some major issues. I’ll have to make sure to do my research first if I decide to invest in some real estate.