Why Invest In Stocks When There’s Real Estate?

Real estate has so many benefits that stocks don’t offer. It offers certainty, tangibility, leverage, and control—all of which are lacking in stocks.

The Certainty of Real Estate

People will always need roofs over their heads, and houses are everywhere. But when dealing with stocks, you have to deal with much more volatility. You may always need a computer, but you won’t necessarily have that brand of computer to invest in any longer because that computer company might go out of business tomorrow.

A Hard Asset

Houses are tangible. You can physically see and feel the product. So you know where your money is going: It’s going into that house. But with stocks, you have no clue where your money is going, or where it’s necessarily going to be used. Once you buy the stocks, your money can be utilized by the company’s employees in any way they see fit.

The Power of Leverage

The simple fact that you can purchase a $5 million property with $1 million is huge. And having someone else pay down your mortgage (a tenant) while simultaneously getting more equity is also a benefit. Additionally, using leverage also multiples your cash-on-cash returns. In stocks, leverage is nonexistent.

Value Adds Up

When you or your tenant make improvements to a house, the value of the property increases. With stocks, you don’t have any direct control over the company. Just because you’re stockholder, that doesn’t mean that you can do anything if the company goes under.

As a owner, you have control over the property: Tenants can be evicted(try to avoid), rooms can be added, and roofs can be repaired. Meanwhile, you’ve pretty much hit the ceiling of your control over things as soon as you’ve bought the stocks.