Property Management Education

What’s the Better Investment? Real Estate or Stocks?

IN THIS BLOG:

  • The better investment: real estate vs. the stock market
  • 5 reasons to invest in real estate

If you are tired of the lack of predictability in investing in the stock market, it may be better to consider investing in real estate. Why invest in real estate?

1. Cash flow: Every month a rental property has tenants, the owner of that property receives positive cash flow. While there are slight risks associated with this cash flow, positive monthly income is generally a reason investors choose to invest in real estate over traditional stock options.

2. Tax deductions: At Grace Property Management, we have investors who have chosen investment real estate over stocks for the tax deductions alone. The IRS allows investors to factor in depreciation of the real estate over time as an expense item. At the end of the year you may be able to leverage depreciation to show loss. Depreciation is just one of the tax deductions real estate investors are able to take advantage of.

3. Equity: Investors can capitalize on an increase in equity over time. Every month that the mortgage is paid down on the property, the equity increases.

4. Appreciation: Historically, appreciation presents a great case in favor of investing in rental properties. Real estate values generally continue to appreciate over time. Long-term investors are able to capitalize on appreciation as they hold onto rental properties.

5. Control: Real estate is a tangible asset. As opposed to stocks, real estate is more than a piece of paper. Many real estate investors like the control they have over their assets not offered in traditional stocks and bonds.



Over time, these five aspects combined can’t help but to propel an investor to financial independence. We have worked with thousands of investors in local property management markets like Thornton and Westminster since 1978 to help them reach financial independence by coaching them to be cautious and not over-leverage.

Have questions? Give us a call, 303-255-1990.

 

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