Stock Market vs Real Estate as an Investment

ISLAMORADA, Fla. - Dec. 18, 2015 - PRLog -- Per Kim Bagnell Thaler, Top Producing Real Estate agent for Sotheby’s International in Islamorada Florida,"Investing can be quite tricky, and, becomes very complicated when deciding which to invest in: real estate or stocks. With the latter, you’ll generally receive a higher rate of return, have a liquidity advantage, have access to a wide variety, and, acquire at a lower transaction rate.

However, stocks, as most consumers know, are volatile and can quickly lose value. There’s been many times bad news has triggered a sudden selloff on the market, which causes values of shares to fall markedly. There is inherent risk in stocks because of the very nature of the free market.

Investment Types

When trying to decide between investing in real estate or stocks, it’s very helpful to know what each is and what each offers:

● Real Estate: Real estate is an investment in physical land, be it a vacant parcel, or, land with an improvement, such as a residential home or commercial building. The value of the property is dictated by the local market conditions, which generally, rise over the years.

● Stocks: Stocks are purchasing a share or percentage of a publicly traded company. The value of stocks rise based on the overall economy, but also, the microeconomy for the industry. For instance, shares of a retailer might fall due to contractions in the economy when consumers have less purchasing power.

As you can see, there are real differences between the two in their fundamentals.

Real Estate Investment Benefits

Real estate as an investment provides you with certain benefits, which include, but are not limited to the following:

● You maintain control. Unlike stock values, which are based on the performance of a company, you have more control because you can make improvements to increase property value. You also decide where to buy and what type of property to buy.

● Tax advantages. You are able to take advantage to certain tax benefits with real estate. When stocks increase in value and you cash-out, you pay capital gains taxes.

● Less volatility. There’s much less volatility in real estate than in stocks because it’s based on market conditions, not corporate performance.

● Lower risk of fraud. Consumers are quite familiar with corporate malfeasance, but, the same risk is practically nonexistent in real estate.

Another benefit is that real estate can be used as leverage for more purchasing power. For instance, if you buy a rental income property as an investment and amortize the mortgage over many years, the equity is an asset which can be used to purchase another rental property. It can also be used to make improvements to the rental you already own in order to charge higher monthly rates.

Kim Bagnell Thaler is a pioneer among Florida Keys realtors. Regarded as one of the most influential realtors in the middle and upper keys, she provides expert and professional real estate service.

With her vast knowledge, 20 years experience and commitment to the highest ethical standards, Kim remains a standout among other Florida Keys Real Estate  Agents.