Investing in real estate or in shares?

We will help you to compare with different points, an investment in real estate or in shares in the stock market, in order to know the most favorable.

Specifically, people who have money to invest often ask the question, "Which is a better investment - real estate or stocks? There is no exact answer because it depends a lot on your preferences and your investment strategy. However, let's start by looking at each type of investment:

Let's look at these two types of investments:

Investing in real estate with a rental investment is buying a property to rent out, either a house or an apartment. You receive monthly rent from your tenant, pay the expenses, and keep the difference as profit.

Investing in the stock market with shares represents financial participation, you buy a piece of a company. You can buy shares in any company regardless of its business. You hope that the company will increase in value so that you can sell your shares at a higher price.

Is investing in the stock market a good idea?

Everything depends on your investment strategy. The stock market can make you dream because it allows you to make high capital gains in a short period of time, but investors are never safe from a reversal of the situation at the same time.

If you invest for the long term, your profitability will depend mainly on when you invest: if you buy shares at the highest, it will be very difficult to make a good profit in the long term.

Although the market has been on the rise for several years, concerns remain with the rise in interest rates and oil prices, for example! It is necessary to be very careful. It is not systematically the case, many investors get used to the increases and forget that the market follows cycles. Inevitably after a bull market follows a consolidation or a bear market.

No one knows the future of the stock market, but investing in stocks requires considerable vigilance. You need to review all your stocks as much as possible... In addition, it is highly recommended to diversify your stock investments to avoid being too affected by sudden changes.

Real estate can be an alternative to investing in the stock market or in stocks. However, it is important to be aware that it is not without risks, like all other investments.

Why is it advantageous to invest in real estate?

Real estate is the preferred investment of the population. It is a more stable market than the stock market.

By investing in real property, you can take advantage of the leverage effect.  Leverage is the ratio between the money you put in and the money you are lent to make your investment.

When you buy your investment, you will usually take out a bank loan. On average, the contribution is 20%, and the bank lends the rest. In the case of rental investment, you will rent out your property, and the income generated by the rent paid by your tenant will allow you to repay your loan.  Thus the leverage effect is important for real estate investments. Unlike in the stock market, the use of financial leverage is much more limited.

Indeed, when you invest in real property, once your loan is repaid, you receive additional income every month with the rent paid by your tenant. Whether you are working or retired, you know the amount you will receive and its frequency. Moreover, in the long term your investment in the stone constitutes a heritage which you will be able to transmit to your descendants.

With shares you can lose a large part of your stake in a few days. Contrary to real estate, the drops are less important due to the longer transaction times, and the longer duration of an investment. Stone is therefore much more stable than shares.