Individuals looking to invest their money may wonder which option is going to yield them the best results; there are many investment alternatives out there, stocks, bonds, real estate, but which one is the best? Trying to determine this is almost like comparing apples to oranges, however there are many advantages and benefits real estate has that the others do not.
Many investors choose to invest their money in real estate because of the stability of the real estate market, the manageability of the risk and because they can control their own money. If they rent out the property they also have that income to add to their wallets and on the flipside, if they reside in the home, it provides a benefit that isn’t monetary; they get to essentially live in their investment rent free. The tax advantages of investing in real estate are also another perk that other investment vehicles do not provide.
While stocks and mutual funds do change in value, they are very volatile; they are high risk and offer the investor no control. Bonds and CDs do not offer a change in value and over the past decade or so have offered a very low return, ranging from between two percent and four percent.
When looking at real estate return investments over the past fifteen years, a portion of which includes the housing crash, the average return on investment for real estate was approximately 108%. When looking at the stock market for this same time frame, a portion of which includes the stock market crash, the return on investment was right around negative 30%. Clearly the stability and benefits of the real estate market are much more advantageous to investors than a volatile stock market that can boom and bust at any given time.