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Is Real Estate Investment Better Than Investing in Stocks?

By Edited Aug 4, 2015 0 0

There is clear-cut rewards to real estate investment in spite of the millions investors have dumped into the stock market. As a matter of fact, investing in real property for profits is among the commonest ways of generating additional income in today's marketplace.

Let's take a look at just a few examples to illustrate how come cautious and well-informed real estate investment could make better sense to an investor than investing in stocks. Before we  begin, while, it should be observed that investing in real property isn't a bed of roses without danger, and does include a few downsides worth noting.

Real Estate Investment Downside...These points can affect your Real Estate Investing Success.

>>>> Point Number 1. Liquidity...Real property normally can't be turned to cash overnight. Whereas stocks can be sold over the phone, the process of selling equity in a real estate investment may take  a few months or longer.

>>>> Point Number 2. Slow Market Response...Real property also has a more sluggish response time than the stock market and consequently needs a lot more patience by investors. Whereas the ups and downs of stocks are in actual time and thereby let you see your gains or losses as the market changes, this isn't the case with real estate investing. You will have to wait months [in all likelihood years] before you see the real value of your investment. This is one of the secrets of Successful Real Estate Investors.

>>>> Point Number 3. Less of a Sure Thing When it Comes to Market Value...The stock market is more streamlined when it pertains market value than investment in real property. When you buy or trade a stock, for example, you can be certain that the cost or selling price was indeed the "right" price on that day and at that time since the existing cost for the stock takes into consideration all relevant available data about the company.

This isn't the case with real property value. The purchaser and vender must determine the actual value on their own, whether it's high or low. This, naturally, is how come seasoned investors research the local marketplace and make use of real estate investment software to go over numbers before they invest.

Real Estate Investment Upside... These points can provide Real Estate Investment Solutions for investors.

>>>> Point Number 1. Leverage...Real property lets you borrow money to buy; in general not something you'll be able to do when purchasing stocks. Furthermore, the stock market, by law, restricts the amount of leverage [margin] you'll be able to use to purchase stock whereas there are no such limit in place with real property. You can buy investment property with a little amount of your own money, and sometimes with no money down without any constraint other than a loaners willingness to lend you the money to purchase the property.

>>>> Point Number 2. You Will be Able to Buy below Market Value...It's usually tough to come across [under valued] stock on a day-to-day basis, whereas-especially in this afflicted economy you can buy properties at Hugh discounts way below market value if you search for them.

>>>> Point Number 3.  Depreciation Can Work in Your Favor...One of the pluses of investment property is the tax benefit you'll receive through a depreciation deduction [or "cost recovery"]. Specified as a loss in economic value to a property over time. Depreciation is a non-cash tax shelter tax write-off in full compliance with the tax code [check with your accountant for all the benefits]in which the government authority lets you assume that the buildings [does not apply to the land] are wearing out over time and as a result are of less value, thereby letting you to take a deduction for that assumed depreciation in the value of your property.

>>>> Point Number 4. You Can Control The Value of Your Property...Investment property is unequal to other investments since its value is largely moderated by the investor. With a few non-superfluous capital improvements and/or persevering property control, investors can increase the value of their investment. This isn't an option with stocks.

All right, you get the drift. Investing in real estate and using Smart Investment Strategies is a profitable option to the stock market. As mentioned, real estate investment isn't a guarantee road to riches, and for certain needs more insight and effort. All the same, if done correctly, real estate can be among the smartest investments that you can make.



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