Why Real Estate Over Stock Market?

[Kyle Fitch]

Hello, 

I’m new to real estate investing and was hoping some of you would share your thoughts on why it is better to invest in real estate over the stock market. 

So far, I’ve only invested in stocks and the idea of investing in real estate seems somewhat risky to me.

[Dan H.]

My thoughts for RE

- leverage amplifies appreciation

- largest RE expense (principle & interest) is typically fixed for long duration (often 30 years).   This virtually guarantees increased cash flow.

- equity pay down is guaranteed.  The equity pay down in many RE classes (residential, storage, hotel/motel, office space, industrial, etc) ispaidby the tenant.

- there are ways to never pay tax on gains (1031, owe until death, etc)

- cost segregation can in effect have RE acquired at no cost

- sweat equity can produce additional return. If part of BRRRR can acquire RE at no cost

My thoughts for stocks

- stocks are more passive than residential RE

- lots of diversification options in stocks

- more liquid with lower liquidation costs

Note owning both RE and stocks is a great option.  I have made a lot of money in both.  I have made more in RE, but it required more work.   

Good luck