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Investment property or stocks?
Should you invest in stocks or investment property to build your wealth? In this video, we explore both options and see which one can help you better achieve your financial goals.
Investment property or stocks?
Should you invest in stocks or investment property to build your wealth? In this video, we explore both options and see which one can help you better achieve your financial goals.
Should you invest in stocks or investment property to build your wealth?
Investing in stocks and investment properties have their respective pros and cons. When deciding whether to invest in property or stock, there is no simple answer. Aside from the different variables we need to consider when investing in either market, identifying the better choice will also depend on your personal situation and preferences.
An investment real estate is a property purchased for income-generating purposes. It can be an apartment building, a condo unit or a commercial property. Due to its familiar nature, investment properties are a favorite among investors. Investment properties are considered as a safer and traditional way of building your wealth because it is a tangible asset. While it needs a big capital because of the deposit requirements (you need at least 20 to 30 per cent of the purchase price), it has the potential to provide a passive income through rental payments. The tax deductions, passive income and equity boost provided by a positively geared property also add to its attractiveness among investors.
This doesn’t mean that stock investing is a less attractive option. By purchasing shares of a company, you are entitled to dividend payouts. These dividends are directly proportional to the profit of a company. If you invest in a company that is financially strong, stocks can provide you with a solid income in the long term. Another advantage of stocks is that it is highly liquid. Prices of stocks on exchange markets are highly volatile. If invested wisely, shares can potentially make capital gains at a faster rate than property would.
Simply put, both investment properties and stocks can help you grow your wealth in the long term. However, they also come with risks. To learn more about the advantages and disadvantages of investing in stocks and in real estate, read here.
Should you invest in stocks or investment property to build your wealth?
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