As an investor, you are probably considering investing options that are guaranteed to bring you stable income, increase your wealth, and grant you and your loved ones financial security in the future. The beauty about investments is that they come in various shapes and sizes.
From the wide range of investment options on the market, two stand out: real estate and the stock market. These two options are unique, with each offering unique opportunities to investors.
In this detailed article, we cover the benefits of real estate and the stock market as investment opportunities. But which one is ideal and able to meet your needs as an investor? Our team from Gifford Properties & Management has the answers you are looking for, so just keep reading.
Real Estate Provides a Stable Cash Flow
A rational investor is always looking for an investment option that will guarantee a consistent cash flow. Of the two options mentioned, property is known for its stable cash flow returns, especially when you have invested in an income-generating property (be it residential or commercial).
To enjoy steady returns, you need to have invested in the right type of property that is in a good location and has quality tenants who pay their rent on time. The expertise and experience of a professional company comes in handy to help you navigate the technical nature of the industry.
Stocks, on the flip side, are not known for their steady returns. Stocks are held for their long-term potential, where an investor or stakeholder will hope for a sizable return once the stock price has increased steadily and they decide to sell.
You Can Hire Someone to Manage Your Investments
Managing your investments properly is extremely important. Due to how volatile investing can be, most investors tend to delegate the management of either their real estate or stocks to a professional.
If you decide to invest in real estate, you can outsource the management to an experienced and reliable company like Gifford Properties & Management.
We handle all the daily operations of your property, from the filling of vacancies to the collection of rent to the screening of potential tenants. You can rely on us for a comprehensive management solution.
For the management of your stocks, you will have to contact and hire a fund manager. While they offer similar services to a property manager, a property manager gets paid when you receive rent from tenants.
This is not the case with stocks due to the minimal transactions associated with them. If you have a fund manager, you will have to pay their professional fees using other means.
The Stock Market is Volatile
Investors with years of experience will agree that the timing of an investment is everything. An investment will have its ups and downs and the time of entry will determine when you can enjoy good returns from the investment.
Real estate offers you a considerable level of stability and protection from inflation and economic shocks. Provided that you pick a property in a good location, you will be able to enjoy protection from inflation.
Stocks have been known to be quite a volatile investment. You can go to bed with your stock being valued at $50 per share and wake up the next day to find a significant drop in value. This is a situation that can lead to more than half of your initial investment going down the drain.
Choosing to invest your funds in real estate is a more viable option and also offers you peace of mind as an investor.
Real Estate Appreciates in Value
Real estate is a valuable long-term asset. Due to its immovable characteristic and its limited supply in the market, the values of property generally appreciate over time. Property owners can also increase the price of their property (known as forced appreciation) if they maintain their property and make structured renovations.
You should keep in mind that property can depreciate in value under specific circumstances, such as a situation like the 2008 financial crisis. There is much less of a guarantee of value appreciation with stocks. You can own stock for several years, even decades, without a change in price or value.
There Are Many Tax Deductibles on Real Estate
One of the benefits of choosing to invest in real estate is tax deductions. Leasing your property is a business and you will be required to pay taxes for that business.
You can reduce the taxable income by using several tax deductions that are allowable by law. You can write off the management fees, maintenance costs, mortgage interests and more.
There are a few tax deductibles allowable in the stock market. The most common deductibles are when you make the sale of stock for charitable donations or retirement account contributions.
With the above-mentioned characteristics and differences, you can agree with us that real estate is a far better investment option than the stock market. By investing in a prime neighborhood, you can get a stable return, enjoy an appreciation in value, and get tax benefits every fiscal year. Want to know more?
Get in touch with the property experts at Gifford Properties & Management. We help investors in Fleming Island and beyond begin their rental property journey. Rely on us for quality service, professionalism, integrity, and accountability. Call us today and receive a quote for our property services and solutions.