Choosing the right investment can increase your income and establish financial security for you and your family. But each investment type has its own potential and requires different levels of commitment.
But what is the best investment for you: stocks or real estate?
Stocks and real estate investments are two of the best investment types that are available to you. But investors frequently debate which of these are best suited to their needs.
But, at Keyrenter Premier, we believe the best investment for long-term financial success is real estate. So, we have put together the following article to show you exactly why we believe this!
Easily Value Your Assent
Properties are easy to value as they are simple to compare to one another. In contrast to intangible assets like stocks, whose values might be rather arbitrary. Even if you don’t know how to value a property, the process is easy, and many there are many professionals who can assist you.
You can even determine a very rough value for your property by using internet calculators and comparing it to nearby properties. So, you can always have a figure in your mind as to the value of your property.
Appreciation of Your Investment
Typically, real estate increases in value every year as long as your property is well taken care of. Plus, the demand for real estate is rising thanks to an increase in population and a scarcity in housing options.
Should the market stagnate, then generally real estate increases in value. You can also make upgrades to the property to artificially increase its value such as: changing the type of floors, remodeling the kitchen, or even adding bathrooms to every bedroom.
Compared to the stock market, where the appreciation of a portfolio may be relatively consistent, you can never guarantee an increase or artificially increase the value of your assets.
Generate Consistent Cashflow
There are very few investment options that offer consistent cash flow like real estate does. With real estate, you can enjoy a consistent income, provided that you have good tenants in place and a rent collection system that is reliable.
Compared to the stock market, the trends in the real estate market are much more stable and slow-moving. In the stock market, cash flow is neither guaranteed nor consistent. With dividend payments and prices in the market changing nearly hourly, it’s difficult to say for certain if the cash flow generated by your portfolio will be consistent.
Leveraging Your Investment
Using leverage by spending a small amount of one’s own funds and borrowing the remaining funds to purchase a property is a major advantage of real estate investment. You can invest in quality real estate for as little as 15% of the total purchase price if you come up with a down payment from your savings and obtain a home loan to cover the balance of the cost of the property.
This means you just put a very small amount of your own money into the property, but you still get to own it. It also guarantees that you don’t invest all of your life’s savings in real estate and that you set aside some money for the future.
The stock market, even though it has a low barrier of entry, doesn’t offer the same options. This is because most financial institutions won’t take a stock portfolio as collateral for further investments.
Benefit from Tax Breaks
Property investors have many legal ways of navigating around their property taxes. Every month, you can make legal tax deductions in the form of mortgage payments, repairs, management fees, insurance, and property depreciation as well as the 1031 Exchange facility if you’re looking to change your investment property.
But, if you invest in the stock market, the tax breaks you can receive are far fewer. In particular, capital gains tax can really dig into your yearly profits, especially if you are active in the stock market.
Providing Financial Security
There is much to feel confident about when you invest in the real estate market. Provided that you have invested in a prime location, you can enjoy consistent appreciation in value over years. Real estate may go through ups and downs and lose some value along the way, but historically it always bounces back.
Real estate investments are not only for the working but also for those looking to retire. Retirees have put their savings in real estate to offer them consistent cash flow. Others have invested in real properties, flipped them, and made a profit.
Instead of keeping their money liquid in a cash account or putting it in the stock market, some people feel more confident knowing that their money is invested in real estate, which is a safe investment.
As an investor, it is recommended to put your resources in an investment that gives you peace of mind. But the stock market rarely gives peace of mind. A single event, without warming, can cut your investment value in half. But, you cannot expect the same in the property.
Renting out your property is not volatile and often serves to absorb shock from the economy. In addition, since there are various types of real estate, you can diversify your investment across different assets in several States. For example, you can invest in student accommodation in one State and commercial real estate in another.
At Keyrenter Premier Property Management, we are dedicated to providing thorough property management services to real estate investors and owners at every point of the investing journey, from buying your first rental properties to growing your rental portfolio.
Personalized communication, white-glove service, and a dedication to quality for our investors are the core values that guide the whole Keyrenter Premier team of property managers in their daily lives and work. To all our clients, we provide effectiveness and dedication.