We often wonder what are a better investment option- stocks or real estate. While some may be more inclined towards the former, others may find latter a safer option. Below is a comparative analysis that will help you decide on what is better.
Stocks Vs Real Estate
Performance:
When it comes to performance, stocks win by a big margin. The rate an individual gets on stocks is around 10% while on real estate it does not go higher than 3%.
Costs:
Stocks do better here. Today stocks buy and sell for a transaction rate of 10 dollars or lower, while funds take up 1% of ones investment.
Transactions of Real estate can take away 10% of the home selling price because of additional incurring costs such as- assessment, examination, dispensation, insurance, credit account checks, transfer tax, costs of agents, and the like.
Benefits from other people’s money
Real estate does well when it comes to benefiting you from other people’s money. It is a fact that you can take money from people to make money on stocks. However, using leverage is more beneficial while investing in real estate.
Leverage through real estate is also much more usual as homeowners struggle to buy homes as per their pockets. Doing so has made millions people across the nation.
Taxes:
When it comes to taxes, real estate takes the cherry. You can subtract the interest on mortgage and property related taxes; you can ask for the initial $500,000 of profit from the selling of your home, tax free, and there are also leasing and commercial property tax cuts obtainable such as cuts on repairs of rentals, decrease in value and the like.
Transparency:
Both score equally on this ground. It’s important that you have full and factual information about all your investments. When it comes to stocks and real estate they both have their respective advantages and disadvantages. At the end of the day, you as an investor have to decide whether the information you have is trustworthy or not. However, bare in mind, if you take too much time in deciding, you might actually miss the bus.
Remember to make sure that while investing in stocks or real estate, you do your homework well. It’s a fact that you can earn millions through such investments, but you can also loose a lot of money. Hence, take professional help when needed and keep your eyes and ears open.