Monthly Archives: May 2013

Is it better to invest in property or the stock market?

Many people ask is it better to invest in property or the stock market? Few years ago most financial experts considered that investing in properties is the safest and in many cases most profitable type of investment. But the global economic crisis has proven that there is no economic sector that can remain unaffected by the economic trends. We’ve seen rapid loss of value in certain properties that were considered to be safe.

On the other hand, investing in the stock market is always popular and recommended by many experienced investors (some of them are on the list of the wealthiest persons in the world), especially penny stocks which can produce gains that out-perform the market – of course the main problem is knowing what penny stocks to buy – looking for the best list of penny stocks is key. That’s why many investors today are placed before the dilemma of investing in the stock market or investing in property. Since there is no precise answer to this question, the best thing to do is learn the advantages that both investments bring and evaluate which one suits you better.

The stock market or the stocks to be more precise can be sold much easier with the right stock alerts. Unlike properties where you need to find customers, a process that might last for weeks, selling stocks can be finished in a matter of minutes. Now with the help of the internet this process is even more convenient and on top of that the commissions are much lower. If you are using the service of a real estate agent you will have to pay relatively high commission compared to what you have to pay to the stock broker. Stocks don’t require any kind of maintenance, while your property needs to be maintained, you will have to invest in it after some period of time etc.

The stock market is much more opened compared to the property market. You can invest in stocks in companies from around the world without any problems while you certainly can’t buy properties wherever you want (in some cases because of the price in other cases because of the law).

When it comes to properties, probably the best thing about this investment is that the future of this investment depends on you. Of course, you can’t affect the real estate market and the value of the land in your neighborhood but you can always improve your property, you can make extra investments etc. When you invest in stocks (unless you buy enough stocks to take control of the company) you only have minor influence (in most cases no influence at all) when we talk about the company’s future. You can use your property to obtain credit more easily. You can use a mortgage and get money that you can invest in other things. By owning a property you can get a lot of tax deduction benefits – tax free profits, tax deductions, bailouts if you can’t pay your mortgage etc.

This is something that you can’t get if you invest in stocks. Stocks can produce dividends but if you have invested in a property on an attractive location you can get monthly rent that is way higher than those dividends.

As you can see both investments can be beneficial and the best option is to invest in both areas if you have the opportunity to invest more money.