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Real Estate vs. stocks; why Real Estate Takes the Upper Hand.

Real Estate Vs Stocks

Real estate and stocks both have the potential to yield high profits, however they operate in completely different ways. The biggest difference is that real estate is a tangible asset, whereas stocks are not. Real estate investment involves acquiring a physical property and choosing an exit strategy to make money. Stocks involve purchasing a share or shares in an existing  company, which is something that cannot be physically represented. This difference makes stocks much more liquid than real estate, which means that stocks are easier to buy and sell at a faster pace.


Another key difference between these investment types can be seen by looking at their required management strategies. Compared to long term investments and stocks, real estate often demands a much more hands-on approach, especially if you opt to flip houses for a profit. While working with property managers or a hands-on business partner may alleviate some of this responsibility, there is always a certain level of involvement that comes with real estate investments. Stocks, on the other hand, are more hands-off and typically require long waiting periods and low levels of involvement.


Benefits of real estate investment: 


There are several benefits of real estate that make it an excellent investment choice. With the right property manager, rental home and support, you can generate consistent passive income — which can, in turn, be used to grow your investment portfolio. 

Real estate is also associated with numerous tax benefits. Mortgage interest, rental property depreciation, and even property taxes can count towards deductions and ultimately minimize expenses. 


Most notably, the biggest benefits of real estate investing is that you can get started with little or no money. Typically, only a down payment of 20% is required to purchase a house. Additionally, with house hacking, crowdfunding and private money lenders, you can generate enough money to finance a property faster than you might imagine. This makes real estate a highly accessible investment strategy for those who can identify the right financing sources.


Why Real Estate? with Arie Van Gemeren


Arie is the Founder & Managing Member of Lombard Equities Group. Prior to founding Lombard Equities, he was a Principal at Rising Tide Ventures, a technology and...

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