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The Ultimate “Real Estate vs Stocks” Showdown:
Who’s the Clear Winner?

Real Estate

When it comes to building wealth, which is the better strategy: real estate investing or building your stocks portfolio?

There is no simple answer to this real estate vs stocks debate.

The strategy you choose depends on various factors, including your lifestyle preferences, personality, and comfort with risk. Plus, it also depends on the timing.

A few stocks would have offered the profits that the debt-ridden Californian beachfront property of the 70s provided after 20 years. And, no real estate can compete with the returns that investors earned from buying shares of Walmart, Amazon, and Microsoft early in their journeys.

While timing is key, understanding each investment type will help you choose the best strategy to grow your money so you become financially secure.

Real Estate vs Stocks: A Comparison

When you purchase stocks, you are buying a piece of a business. If an organization has a million shares, and you own 10,000 of them, you own 1 percent of the organization.

Your stock value grows with the growth of the organization’s shares. A board of directors (B of D) elected by shareholders, like yourself, keeps a close eye on the management. The B of D also decides how much of the company’s profits will be reinvested every year and how much gets paid out as cash dividends.

Real estate investing, on the other hand, involves purchasing a physical property or a parcel of land and then using it to generate income. These properties incur expenses, like maintenance and taxes, as you manage them or hold on to them as you wait to sell to a developer.

Some investment real estate properties that generate cash include rental homes, strip malls, and apartment buildings. You must pay for property management expenses, receive rent from tenants, and keep the difference as profit.

Investing in Stocks


Purchasing stock shares exposes you to significant benefits and some important demerits you need to remember before taking the plunge.

Merits of Investing in Stocks

Demerits of Investing in Stocks

Investing in Real Estate

real estate

Is real estate investing the right vehicle for you? Here is what you need to know.

Merits of Investing in Real Estate

Demerits of Investing in Real Estate

Other Factors to Consider

Purchasing a real estate property requires a higher initial capital compared to stocks investment, real estate investment trusts (REITs), or mutual funds. However, it provides you more leverage over your money, so you are buying into a more valuable investment vehicle.

For example, investing $30,000 in securities offers you $30,000 in value. The same amount in real estate can buy you $140,000 in a property when you consider tax-deductible and mortgage interest.

The cash you get from rent can also cover expenses, such as property taxes, insurance, mortgage, and repairs. Overall, well-managed properties generate more income for owners and property investments companies alike. The rental income can also increase in tandem with inflation even in rent-controlled areas, which is a big bonus benefit.

Who Is the Winner?

Both stocks and real estate offer you long-term financial gains, but both come with risks. While weighing your “real estate vs stocks” options, remember to keep your risks low by opting for a variety of sectors or asset classes. Investors are putting money into both real estate and stocks. If you love the idea of investing in a property, but don’t want to deal with ownership and management issues, a REIT is worth a second look.

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