Real estate is a solid investment option with several advantages over stocks. While the stock market has been on a roller coaster ride, and housing prices have dropped recently – real estate remains one of the most stable and lucrative investments. Here are five reasons why investing in real estate is better than investing in the stock market:
Real estate is tangible
When you buy a property, you can see and touch it. You can also rent out your investment to make money while enjoying ownership’s benefits. Before you understand why real estate is less volatile than the stock market – you need to know the difference between them and why real estate is a better investment.
Real estate is not an intangible financial asset like stocks or bonds; instead, it’s considered a physical asset because the land has value–not just its potential use as collateral for loans or as an income-producing property (although those are important).
This makes real estate investing different from other investments like stocks because there aren’t any paper promises involved: when buying land with your hard-earned cash, there will always be something solid beneath your feet!
Real estate has low transaction costs
In the stock market, transaction costs can be as high as 2% of the sale price. The difference between 1% and 2% may not seem like much at first glance, but it can quickly add up to hundreds or even thousands of dollars in lost profits.
Transaction costs are paid by the seller and not charged to buyers like they are with stocks; this means that you don’t have to pay any money out-of-pocket when buying real estate property–the only cost associated with selling it is your time spent finding an agent who will list your property for sale (which should only take about 30 minutes).
Real estate is flexible
Unlike stocks and bonds, real estate has low transaction costs and can easily convert into cash. In addition to being flexible and liquid, you have control over your financial destiny because you don’t rely on anyone else to make money in the market (unlike with stocks).
You can control your financial destiny
One of the most appealing aspects of real estate investing is that you can control your destiny. Unlike stocks, which are traded on the stock market and subject to factors beyond your control, real estate is something that you can buy and sell at any time.
You don’t need anyone else’s permission or approval before purchasing property or selling it off for a profit–and if there are any problems with financing or other issues that might arise, you’re usually able to resolve them yourself without needing help from third parties like banks or brokers.
Easy to diversify
It means that you spread your money across different types and classes of investments, so if one goes down, another can go up.
Real estate is an excellent way to diversify your portfolio because it can be spread across numerous properties–commercial real estate, residential real estate, and even vacation homes are all examples of ways that investors can diversify their holdings in this sector.
You’ll also want to consider geographic location when looking for property investments; this will help spread risk and ensure that no single area has too much influence over your returns.
For example – if you invest all of your money in New York City apartments or office buildings (which are both very popular), then if anything happens locally–like an increase in crime rates or higher taxes–it could negatively impact those properties’ values while leaving other areas untouched by those same issues unaffected by them!
There you go!
Real estate is an excellent investment because it’s tangible, has low transaction costs, and can be flexible and controlled by you. It’s also easy to diversify your portfolio with real estate investments so you don’t have all your eggs in one basket (or “house”).