Real Estate Investing vs Stock Market?
Real Estate investment is a better strategy for building your wealth when you compare it to investing in the stock market.
About 65% if U.S. households do a bit of both, however if you’re looking to double-down on either type of investment, or if you are new to investing,
It is important to know you can purchase shares in real estate investments companies without the headaches of buying, managing, and selling properties on your own.
Traditional real estate investments can be broken down into two categories: residential-multifamily properties; like your home, rental properties and flipping homes to buy, then resell for a profit, and commercial properties, such as apartment complexes, mix-use building, office buildings and strip malls.
Some of the real advantages with investing in Real Estate & “Real” Property are as follows;
Investing in real estate is easy to understand. The basics are simple: Purchase a property, manage upkeep and attempt to resell for a higher value. Also, owning a tangible asset can make you feel more in control of your investment than buying small pieces of ownership in companies through shares of stocks.
Investing with debt is safer with real estate. Also known as your “mortgage,” you can invest in a new property with a 20% down payment or less and finance the rest of the property’s cost. Investing in stocks with debt, known as margin trading, is extremely risky and strictly for experienced traders.
Also, with Real Estate ownership there can be tax advantages. Homeowners may qualify for a tax deduction for mortgage interest paid on up to the first $1 million in mortgage debt. There also are tax breaks when you sell a principal residence, such as an exclusion that may allow you to avoid capital gains taxes on net proceeds. If you own and sell commercial property, you may be able to avoid capital gains through a 1031 exchange (if you reinvest proceeds in a similar type of property). And investment properties can earn tax breaks through depreciation or writing off wear and tear on the property.
Some of the disadvantages of investing in the stock market are as follows;
Stock prices are much more volatile than real estate. The prices of stocks can move up and down much faster than real estate prices. That volatility can be stressful at times, meaning you have to plan to buy or sell despite volatility.
In addition, stocks can trigger emotional decision-making. While you can buy and sell stocks more easily than real estate properties, that doesn’t mean you should. When markets waver, investors often sell when a buy-and-hold strategy typically produces greater returns.
Ready to start investing?
Pinnacle Real Estate Investment & Development is there every step of the way when it comes to passive real estate investing. We give you the tools and a comprehensive plan to make confident investments in our projects with double-digit returns. These are an alternative to traditional real estate: REITs, and similar funds, and our formatting is easy to understand and provides real-time growth charts, so you can see your wealth build over time.
Pinnacle Real Estate Investment & Development is an income-producing real estate firm that develops multi-family & single-family homes, apartments, warehouses, offices, and mixed-use building. Pinnacle is most reliable and has a strong track record for paying high yields and growing dividends.
