Real Estate Investments vs. Stocks

As the economic recovery continues, Americans are again able to invest. Although there are many investment options available, real estate offers several advantages over most of them. First. is the ability to finance a portion of the purchase and leverage the initial investment. The benefit is that you now control an asset valued much higher – unlike stocks, bonds and CDs. Especially now with the historically low interest rates available, a small increase in the value of a leveraged property investment delivers a greater return than an unleveraged investment — approximately 12 percent gross. Investing in real estate also offers very valuable tax benefits, not so with earnings from investments in CDs, bonds and stocks are taxed. The numerous deductions from the profit on mortgage interest, property repairs and depreciation are very advantageous. In addition real estate investors are writing off depreciation of an asset that is typically appreciating providing yearly benefits to a long-term investment. Most importantly, ownership of rental property is an asset generates consistent cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional expenses.