Real Estate versus Stocks

realEstateInvestingOnce you’ve gotten your financial goals in order, you might be considering delving into the world of real estate investment instead of the riskier stock market.  The stock market also has its advantages but, in this case, we’re going to focus on why real estate could be a wiser investment than stocks.

For starters, stocks can easily succumb to inflation. If inflation becomes a problem, your investment gains in stocks can be significantly affected.  Real estate isn’t immune to inflation either, since wood, plumbing, and flooring items can always increase, causing home prices to rise.  However, this can work in your favor by boosting the current value of a home.

Should interest rates rise, bonds and stocks are more than likely going to be negatively affected.  The financing and expansion of operations forces companies to borrow more, reducing profits.  As for bonds, they carry a fixed return rate so if interest rates increase then their value will drop.

Property taxes are a requirement if you own any real estate, but these can potentially be factored into the purchase of rental property and whatever cash flow you anticipate you’ll be receiving.  Taxes will inevitably increase, but you always have the option of offsetting that with an increase in rent.

Obviously you’ll need to take some time to ultimately determine whether real estate or stocks is right for you, but these tips may help make your decision a little easier.

This update is brought to you by The Lotus Sisters, experts in Wilton Manors real estate.  We are also well versed in Broward County communities like Fort Lauderdale real estate and affluent Miami-Dade neighborhoods such as Coral Gables and Bal Harbour.  Contact us today to answer any buying or selling questions you may have.