When it comes to investments, we are always concerned about the result. We are anxious if investing in a particular thing would pay off or be a waste of our time, money and energy. It is always hard to predict the outcome of something which is going to happen in the future, but one can always analyze the result through various research and studies. When comparing real estate investments to stock markets, I would have to say that real estate is a much better investment than the socks and the following are some of the reasons why real estate is better.
- You become the owner of the product you invest.
- Real estate markets have higher return rate.
- Tax benefits.
- Fraudsters are less in real estate markets.
You become the owner of the product you invest:
When you invest in real estate, you buy a physical property, and you are in-charge of the product you purchase. Since you are the owner of the product you can do anything with it; you can cut the cost of your mortgage, raise the rent of your house; you can increase the market value of the property by taking up home improvement projects and get better tenants. But when it comes to stocks, you buy a piece of a company. You are not the owner of the entire management, you are entitled to profit, but it depends on the shares you have in the company. You need to put your faith in the company and believe that it will bring you profit, but when you buy a property, you get to control what you need to do with that real estate.
Real estate markets have higher return rate:
An investor is always concerned about the return rate. When the return rates of stocks and real estate markets of the previous years were compared, the real estate markets showed a higher rate of return which makes it more suitable for people to invest. The stocks have had an annual return of 10.31% while the real estate markets have an annual return of 11.42% from the years 1970 to 2016. The S&P 500 Index measures the stocks, so for example, if you happened to invest $10,000 in the S&P 500 in 1970, your investment would have grown to $1,005,588 in the year 2016, but if you had invested the same in real estate, you would have got about $1,609,932.
It is a great option if you have an investment which reduces the amount you need to pay as tax. Real estate market investment helps you to reduce your taxes. When you take a loan from an organization to buy a property, you are exempted from paying a small portion of your tax.
Fraudsters are less in real estate markets:
It is harder to cheat you in the real estate market when compared to stocks. You can easily run background checks for your property, but in stocks, you blindly need to trust the management of the company you are buying the shares.