Because of the internet, people are now more aware of the benefits and lifetime effects of having investments. Some people as young as 15 years old already have excellent portfolios in the stock market.
However, some people don’t realize that investments aren’t just about the stock market. They can be about real estate, too. Some economists and business analysts claim that real estate is a better lifetime investment than the stock market!
Risk: Real Estate vs. Stock Market
In making investments, the first thing you have to consider is the risk of your action. How much will it cost you to get an investment? How much can you possibly lose when things go down?
Investments in the stock market pose a greater risk than real estate investments.
This is because the stock market can be affected by economic changes, inflation, market decline, and even international politics. On the other hand, the most significant risk you’d have in investing in real estate would be the maintenance and rental costs it may take you to make your property marketable.
Returns: Real Estate vs. Stock Market
The stock market can bring you higher passive income than real estate. The average investor in the stock market gets at least 10% income every year, granting a stable market. On the other hand, the increasing value of a house and lot can be as low as 3% a year, depending on your property’s location and condition.
However, you have to keep in mind that the stock market also has limitations. While you’re technically buying a portion of a company, you will never own it. This means that you can’t directly affect the company’s development, and therefore, your investments.
On the other hand, you can do plenty of things to increase the value of your property. You can install solar power systems in your home, make it fully furnished, etc.