Real estate vs stock market investment is a personal choice that depends on your financial situation, risk tolerance, goals, and investment style.
It’s absolutely safe to assume that more people invest in the stock market, perhaps because it doesn’t take as much time or money to buy stocks.
If you’re buying real estate, you’re going to have to save and put down a substantial amount of money but going into real estate doesn’t require you owning a property or having millions before you can start. You might decide being an affiliate for a reputable real estate company. Every journey begins with just a step.
Without wasting much time, following the trend, “real estate vs stock market” which do you think is a better investment?
Thinking of choosing the best investments, try to be careful when making decisions.
Keep reading this article to the finish because the debate between real estate vs stock market will be revealed here.
Incase you are new to knowing real estate vs stock market, a basic info would be made below.
But if you know what it is already, you can jump to the heading “Real Estate vs stock market”
What Is Real Estate?
Real estate is the land along with any permanent improvements attached to the land, whether natural or man-made—including water, trees, minerals, buildings, homes, fences, and bridges.
Real estate is a form of real property. It differs from personal property, which are things not permanently attached to the land, such as vehicles, boats, jewelry, furniture, and farm equipment.
When you buy real estate, you acquire physical land or property. Most real estate investors make money by collecting rents (which can provide a steady income stream) and through appreciation, as the property’s value goes up. Also, since real estate can be leveraged, it’s possible to expand your holdings even if you can’t afford to pay cash outright.
For many prospective investors, real estate is appealing because it is a tangible asset that can be controlled, with the added benefit of diversification. Real estate investors who buy property own something concrete for which they can be accountable.
Note that real estate investments such as being an agent or an affiliate are a way to invest in real estate and are bought and sold like stocks.
There are a number of considerations for investors when choosing between investing in stocks or buying real estate as an investment (Real Estate vs stock market).
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What is Stock Market?
The stock market is subject to several different kinds of risk which involves; market, economic, and inflationary risks. First, stock values can be extremely volatile with their prices subject to fluctuations in the market. Volatility can be caused by geopolitical and company-specific events.
Let’s say, for example, a company has operations in another country, this foreign division is subject to the laws and rules of that nation.
But if that country’s economy has problems, or any political troubles arise, that company’s stock may suffer too. So when things get better, it goes the other way around.
Stocks are also subject to the economic cycle as well as monetary policy, regulations, tax revisions, or even changes in the interest rates set by a country’s central bank.
Other risks may stem from the investor themselves. Investors who choose not to diversify their holdings are also exposing themselves to greater risk.
Consider this: dividend-paying stocks can generate reliable income, but it would take a considerable investment in a high-yielding dividend stock to generate enough income to sustain retirement without selling additional securities.
Relying solely on high-yield dividends means an investor may miss out on opportunities for higher growth investments.
Real Estate vs Stock Market
It’s time to see real estate vs stock market, which is a better and profitable investment.
Both real estate vs stock market has been a great opportunity or an option for most investors in Nigeria to grow their wealth.
Many Nigerians do a bit of both. But if you’re looking to double-down on either type of investment — or you’re new to investing and trying to pick between the two — it’s wise to know the advantages and disadvantages of each strategy.
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Real Estate Vs Stock Market – Real Estate
Over the years real estate have been one of the best investment in the world and most people became billionaires through it.
Real estate is good because it is hedge against inflation. Housing values and rents typically increase in direct proportion to inflation.
Imagine buying a land for 500k, months or years from now, the land can appreciate and can be sold for 1.2 million or 2 million.
Now, you feel the real estate vs crypto is for people o have money. Well I’m happy to tell you that you can actually go into real estate business without money or even owning a property.
If you don’t have money to buy properties, there are some real estate companies in Nigeria that you can work or affiliate with. All you have to do is to register and the registration is free. When you register, you will have access to properties that you can promote.
When you sell a property, the company will give you commission based on what you sold. Commissions varies from 3-15% for a property.
Imagine selling a property for 50 million and you have upto 7% tagged for you, do the maths.
- Long-term potential
- No fear of Inflation
- Easy to sell
- Tangible asset value
- Versatile investment
- Tax benefits.
- High cash flow.
- Long-term returns.
- Not a fluid asset.
- Costly investment.
- High maintenance
- Slow Growth
Real Estate vs Stock Market – Stock Market
For most investors, it does not take a huge cash infusion to get started in the stock market, making it an appealing option. Unlike real estate, stocks are liquid and are generally easily bought and sold, so you can rely on them in case of emergencies. With so many stocks and ETFs to choose from, it can be easy to build a well-diversified portfolio.
But as noted above, stocks tend to be more volatile, leading to a more risky investment, especially if you panic sell. Selling your stocks may result in a capital gains tax, making your tax burden much heavier.
And unless you have a lot of money in the market, your holdings may not be able to grow much.
- Highly liquid
- Easy to diversify
- Low transaction fees
- Easy to add to tax-advantaged retirement accounts
- More volatile than real estate
- Selling stocks can trigger big taxes
- Some stocks move sideways for years
- Potential for emotion-driven investing
With all being said above between real estate vs stock market, which do you think it’s a better investment?
Remember, you don’t need millions before you start investing or going into real estate business. You can start as an agent or Affiliate with a reputable company.
Don’t just rush into any kind of investment you see today. Try as much as possible to do background checks in order not to go into the wrong investment.
No doubt, we know that real estate vs stock market debate or comparism is a good one.
Looking deep, we say, real estate is a better investment. But like I said in this article, some people do both real estate and stock market.