Investing In Real Estate Vs. Stocks-Which Should You Choose
Over the years people have argued about which is the better investment option between 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.
You will need to invest in physical property or land when it comes to real estate. You will need to expend money on a monthly basis as long as you have interest in particular real estate. On the other there are real estate investments that will generate revenues for you.
Buying of stocks is equated to purchasing a piece of the 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. Since they grew up in the midst of its exposure, they are more accustomed to it. They also heard their parents discussing the prospects of investing in real estate.
The advantage of putting your money in real estate is that what you are investing in is tangible. Psychologically this is important to a lot of the investors. The fact that they can see and feel their investments matters a lot to them.
By investing in real estate, you stand less chance of getting scammed. You can physically show up at an investment in order to inspect it. As for stocks your confidence is in the auditors and management.
On the other hand, you need a lot of hands-on work in case of real estate investment. The issues of oversight and attending meetings will still come up even when a property manager is on your payroll.
Investments in stocks accords you the opportunity to utilize the advantages of a great wealth creator. There is no better asset ownership as owning a part of a company which is what stocks is all about.
The process of diversifying in stocks is easier and less expensive. This is unlike in real estate where you will need more money.
The tendency to lose money for stocks investors is high since they are often emotional, undisciplined and fickle in their dealings. Psychological factors are to blame for most of the losses we have seen in the stock’s investments.
You are bound to experience price drops when it comes to stocks investment. The level of volatility is elevated in the stock market as opposed to real estate.