Investment Options: Real Estate vs Stock Market

Investment Options: Real Estate vs Stock Market
By: Greg Vander Wel

In the past, most investors felt that the stock market offered better options for profit than property investments. Today the rising number of foreclosures, not to mention the instability of the stock market, are tipping the scales in favor of real estate investments. Real Estate is winning in the battle of Real estate vs stock market

Between 1978 and 2006, the average profit margin for stock market investments was 13.4%; obviously, there are fluctuations, but for the most part, this has always been more profitable than real estate investments.

This isn’t true anymore. With our economy in a slump, many people are losing money on the stock market. The housing market, on the other hand, is ripe for plucking! Cheap houses for sale can be found everywhere across the country.

What does that mean for you, the investor? Wise investors are always searching for the next best deal, and right now, now, buying investment property is the way to go!

Many areas of the country are currently seeing capitalization rates up near 20%; much higher than profits being seen in the stock market right now. Florida investment properties are currently experiencing cap rates of between 15 and 20%! This is the perfect time to start your property investment portfolio.

A property’s capitalization rate is calculated by dividing its annual net operating income by either its cost or its value. This allows you to estimate your profit margin prior to ever investing any of your money. That’s one benefit you don’t have with the ever changing stock market!

Realnet’s experienced staff of agents can help you with any questions you have. Call us today to learn how you can begin profiting from real estate investments!