5 Advantages of Real Estate Property Investment Over Stock Investment

To this day, property investment remains the best and safest way to invest money! Investing in a real estate property comes with numerous advantages that set it apart from other types of investments, such as stock investment. Here are 5 major advantages of owning a property investment and starting a real estate investing career over investing in stock.

Full Control

The minute you buy a rental property, you’ll have full control over the investment! You’re free to decide which type of investment property to buy (single-family home, multi-family home, condo, etc.) and which investment property financing method to go for (cash, mortgage loan, private money, hard money, etc.). In addition, property investors get to set how much to charge for rent, whom to rent the investment property out to, and when to sell the property investment.

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Cash Flow

Every investor is driven by the same motivation – to make money! Your investment has to give you a return on investment (ROI) which you can either save or reinvest. First of all, there are many ways to make money in real estate. Moreover, a property investment provides real estate investors with a stream of cash flow in the form of monthly rent. Cash flow is an attractive aspect of real estate investing, and it’s usually a sign of a successful property investment. Cash flow covers the property investor’s expenses such as mortgage payments, property taxes, operation costs, etc. and yields a higher return on investment! The key, of course, is buying positive cash flow investment properties.

Related: How to Invest in Positive Cash Flow Real Estate Properties?

Fewer Risks

Property investment has fewer risks than other types of investment, say stocks, especially when investing in real estate for the long term. The longer you hold investment properties, the fewer risks of loss you’ll face because home prices and equity build with time. In addition, a property investment will always have value since they are physical assets, unlike a stock investment which could drop down in value any minute.

Tax Benefits/Deductions

Property investment also offers many tax benefits and deductions. For example, the cash flow from an investment property is tax-free. Additionally, property investors are able to deduct almost all expenses related to owning and managing an investment property, including property taxes, mortgage interests, insurance, and operation expenses. Not only that, but when property investors sell the property investment and reinvest the profits, they will not pay capital gains tax.

Related: What You Need to Know About Real Estate Taxes as an Investor

Hedge against Inflation

Historically, cash flow and investment property prices have kept pace with inflation. This means that as the cost of living increases so do investment properties prices. This benefits real estate investors on three levels:

• As inflation increases, property investors can raise the amount they charge for rent.
• The value of investment properties goes up enough to cover for inflation.
• Mortgage payments are not affected by inflation, meaning their absolute value decreases with inflation.

Therefore, with a property investment, inflation will be on your side.

Conclusion

Owning a property investment definitely comes with many advantages. This is why we at Mashvisor recommend investors to start a real estate investing career. Mashvisor offers real estate investors the best investing tools to help them find and analyze investment properties in the US real estate market.

To explore this topic in more details, read Real Estate Investment vs. Stock Investment.

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