Stock Market Or Real Estate?

Hello guys.
What do you think is more better to invest in “Real Estate Market or Stock Market”??
Because I have heard that there is equal ratio of profit and loss in stock market while in Real Estate you always get profitable return on your investment…!!

You can go to NYSE or S&P website and pull historial numbers since they started recording them. I think you’ll find those major indexes have earned investors somewhere around 8 or 9 percent per year over the last 100 years or so, don’t quote me on that it’s probably been a year since I’ve done this myself.

Its quite clear that real estate does not go up every year. I think the last three years have taught us that.

Some investors only purchase properties at a severe discount such that when they sell their profits are 30,40,50% or more. I believe you make your money when you buy, and you get to actually use that money when you sell. :slight_smile:

There’s risk in both, and if you’re not sure how either operate, find someone who does and start working with them.

Good luck.

“Its quite clear that real estate does not go up every year. I think the last three years have taught us that.”

Its also quite clear the stock market does not go up every year!

absolutely true.

I should have been more clear, I meant on average. It’s easy to look at something over the long haul like that and say you’re doing better now than you were 10 or 15 years ago by 9 percent per year, but the little dips in between can wipe you out just as easy.

Real estate, by far, is the easier investment to retain control over. And if it’s my money, I want control.

Agreed. You have more control of RE…not market prices on a macro scale, but you have control of pretty much everything else. For rentals, your success or failure is based on the financials of the deal and how you manage them. You’re not dependent on some CEO making the right decision to make the company healthier thereby making the stock more attractive.

I’ve had bad years in the stock market, with 2-1 leverage, and lost 90% of my investment,I’ve had bad years with rentals using much higher leverage and lost a much, much smaller percentage.

Now I’m trying to get back to the position I was before the market crashed,but not with the market, with real estate, which I have a LOT more control over.


The equal ratio thing for the stock market just means that there is a centralized market for stocks. The price quoted for a share of stock is the same price for everyone who owns the stock. Every stock owner is affected the same way when the price changes.

Real estate is not priced in a national market, but rather prices are governed by what is happening in your local market. The price of a property that you own in your market has no bearing on the price of a property I own in my market.

Whether real estate or the stock market is a better investment for you depends upon your experience, tolerance for risk, and what measures you take to mitigate that risk. You can make money and you can lose money in either investment vehicle.

If real estate were always profitable, we would not have had millions of foreclosures in the past few years. Whoever told you that real estate is always profitable is mistaken.

You can’t buy stocks with other people’s money like you can with real estate. If you buy stocks on margin you can get 50% but with real estate you can get 80% or more depending on value.

I don’t have $20,000 in all my houses combined. All my houses were bought borrowing 90% of the purchase price plus fix up costs. They were all purchased at least 70% of market value and after I finished financing them I got all these houses with very little to none of my own money left in the houses. You can’t do that with stocks.

One house I paid $70k for it. It had an ARV of $120. I put $10k into it and I financed the whole thing and got all of my money back out of it. I have none of my money in that house. The neighborhood it is in still sells briskly and it can sell in a month for $110k and if I give myself 2 months I can sell it for $120k easily. I am not going to sell it because my PITI is $740/month and I get $1200/month rent. I get $400 every month that I can actually buy hamburgers with. With stocks you don’t get monthly money that you can pay a car note with. I have better cash flowing houses but this one is one of what my father calls my free houses.

Real estate also gives you tax advantages, all my rental income is offset by depreciation so it is tax free, you also have the mortgage being paid down adding to my equity with my tenant’s rent payments. When I sell the stocks I make money and I do with real estate also but I get money every month in the meantime with real estate not with stocks.