Real Estate vs. Stock Market Investing

Posted on November 27, 2008
Filed Under foreclosure real estate investing |

Everything is fair in war! The war of superiority! The competition between stock market investing and real estate has been going on since the mid 1960s, in order to prove to be the best source of investment returns. The stock market was regarded as a place to invest, whereas the realty was considered to be more reliable in the past. The present scenario is more of a revolutionized kind. It showed visible signs of change in the mid 1990s and kept on changing since then.

At present real estate, especially the residential realty that is purchase, renting, reselling and holding of realty assets is the matter of investment choice for the most of investors. Money generally flows as a direct consequence of low interest rates. Mortgaging assets is safer than high-risk speculative stock investments. Residential realty demands have increased manifold throughout the urban areas in North America and to some extent Europe. This generally affects the condominiums and town homes located inside the urban cores but prove to be a boon for single-family assets. Real estate has been compared to gold, which in historical times was considered as a tangible store of value.

The primary reason of the investment revolution is the tangibility of assets. More often than not this is guided by the psychological reasons. Most of the investors would opt for real estate investment where they would be able to see, touch, paint and above all feel the sense of security and possession, rather than the purchase of a share into a distant company over which the investor cannot access any control. Apart from psychological reasons it can be supported by a very valid reason, the reason of availability of financing. In the stock market, there is a constant fear of being severely affected by its loss, as millions of investors have been the victims of such losses, earlier. But, only a few buyers and sellers have been affected in the scandals relating to Real Estate. Lenders have become more comfortable with the purchase of realty market values than that of stocks and bonds. Banks generally give loans on appraised values, and an appraiser of a residential realty determines its real market value with a relatively higher degree of accuracy. This is easier than a stock analyst trying to evaluate the books of a corporation accurately.

A financial institution would lend money far more easily to a qualified real estate buyer than to a stock market investor. This is mainly because real estate assets could be of similar values if they are of similar infrastructure, located at the same place and having similar furniture. However, the same reasoning cannot be applied to different corporations because of several variables, such as location, number of employees, performance, technology, market sector, politics, taxes, rapid growth in population, density, age and other relevant factors in current context of Real Estate over the Stock Market.

People have grown smarter these days. They buy a house generally below the market price, and let the value grow and then capitalize in hundreds and thousands of different ways. Real estate investment is being considered more rewarding as compared to the stock market investment, as people just not believe in spinning money but also securing values.

Comments

14 Responses to “Real Estate vs. Stock Market Investing”

  1. Laura on November 27th, 2008 9:48 am

    What are the best investments someone could make, besides real estate and investing in the stock market?

  2. John on November 27th, 2008 2:50 pm

    buying gold or money
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  3. Melbourne Boy on November 27th, 2008 2:52 pm

    Your own children welfare.
    I know, I know that you would say it is still risky, but aren't everything else nowadays?
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  4. Scott K on November 27th, 2008 2:54 pm

    Well I'm not sure if you would lump bonds in the 'investing in the stock market' but that's an option or CDs.
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  5. caiser on November 27th, 2008 2:56 pm

    depending how much you have to invest.stock market unstable at moment blue chip shares normally safe!??!best guaranteed safe investment in uk is national savings bonds or isas.if you want a really high risk investment give to me i know a dead cert at the 330 at newmarket!!good luck
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    its just me

  6. Natasha23 on November 27th, 2008 2:58 pm

    dimonds, gold, child in some cases
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  7. jmpainting1@sbcglobal.net on November 27th, 2008 3:00 pm

    YOURSELF
    good luck
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  8. Annie M on November 27th, 2008 3:02 pm

    Education, if there are jobs out there for your specialty.
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  9. Peilthetraveler on November 27th, 2008 3:04 pm

    Art
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  10. michael_alca23 on November 27th, 2008 3:06 pm

    You can never go wrong investing in yourself. But if you want to invest your money, I would say invest in a business.
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  11. saahil on November 27th, 2008 3:08 pm

    You can invest in Gold. You can try mutual funds as well. Though mutual funds invests in stock market, the risk is very low as compared to directly investing in the stock market.
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  12. daan m on November 27th, 2008 3:10 pm

    All the other replies are from people who do not invest. I reccomend going in a mutual fund or etf. If you have the time ,you can research on a company and buy their stock. Real estate is horrible right now so don't even think about it. I think stocks are good for you.
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  13. BR on November 27th, 2008 3:12 pm

    Charity and education (your own, your kids' or any kids' education). If you think you was asking from worldly perspective then again, charity and education.
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    Quran.

  14. Senator on November 27th, 2008 3:14 pm

    Buying commodities.
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