Are you an investor? For any investor, the most tedious task is choosing the right investment options. Among different investment options, investors often get confused between real estate and the stock market. You might be one of those investors facing difficulty decide whether to invest in real estate or stock.
First of all, each investment options have their own pros and cons. Before selecting any option, it is imperative to understand the risks and expected returns of that investment option. Identifying the better one is based on your lifestyle preferences, personality, comfort with risk, and other such factors.
Real Estate vs Stocks
When you buy shares of stock, you are buying a piece of the company. By purchasing a particular company’s shares, you get a certain proportion of ownership in that company. Suppose a company has 100,000 shares outstanding, and you buy 1,000 shares of that company. In this case, you own 1% of that company.
The value of your stock grows as the value of the company’s shares grows. The company’s board of directors decides on how much money to be reinvested in the company and how much to be distributed to the shareholders.
Talking about real estate, when you invest in real estate, you are buying a physical property. By investing in real estate, you will also be paying for other costs. For example, the cost of maintenance, taxes, etc.
Just like investing in shares requires thorough research, in the same way, investing in real estate also requires thorough research. Investing in the wrong property can lead to huge losses.
No matter whether you go with the real estate market or the stock market, both investment options require research. In the stock market, you need to do proper research of the company. Check its fundamentals, performance, industry, debt, profit, technical analysis, and much more. In the real estate market, you need to check the location, property history, price, property type, and many other factors.
Why Real Estate Is Better Than Stocks?
Though both investment methods are different, and both are meant for a different type of investors. However, by considering various factors like risk, returns, taxes, volatility, etc., real estate seems a better option than stocks. Here are some reasons why real estate is better than stocks:
One of the best things you will find by investing in real estate is comfort. When investing money, if comfort is more important to you, then real estate is the right option. For many people, owning a home is very important.
Steady passive income
Another great thing about the real estate market is it can provide you stable passive income. By owning a home or any property, you can give it for rent and keep making a stable income. The stock market can also provide passive income; however, there’s no guarantee it will provide steady income.
One of the major reasons why many investors prefer the property market over the stock market is because the stock market is very volatile. Due to high volatility, it has the potential for emotional driven investing.
As a real estate investor, you can take advantage of different tax benefits. Tax advantages mean you can avail of deduction when filing income tax. On the flip side, selling of stocks can trigger big taxes.
In a nutshell, the real estate market is better than the stock market. If you are interested in real estate investment, it is best to invest in countries with consistent growth. Cambodia is the best example. Investing in Cambodia property can help you get better returns than the stock market. To find the right property in Cambodia, you can contact Dragon Real Estate.