At some point, most people want to invest, but they find themselves with a fair question: should I invest in real estate or the stock market? But before making a decision, it’s important to understand that those are two different assets and that they are managed by distinct conditions.
Leverage use for increasing your potential profits is one of the real estates’ features. Likewise, the chances of getting a loan from a bank to purchase a property are higher whereas you plan on using it to buy stocks. Most likely, you’ll receive a no for an answer.
Why does it work this way? Whenever you purchase a property the first thing you’d do is to get an insurance if you don’t have it already. When it comes to stocks, there’s no way you can get one facing a higher risk. That doesn’t mean there’s no jeopardy in real estate, but it’s definitely lower than with the stock market.
What about profits? Which is more profitable? As said before, the stock market depends on many factors making it extremely volatile. On the other hand, real estate provides you with the benefit of getting returns by choosing the right neighborhoods, the soil the equity is built in, and the property itself. It all depends on your vision for investment and what you want to achieve with it.