IS REAL ESTATE BETTER THAN FINANCIAL ASSETS?

Share:

When choosing the type of investment it is important to consider all variants such as lifestyle and personality. We can help you understand the pros and cons whether to invest in real estate or other financial assets.

Among the many markets to invest on, there is one in particular that is slightly different from the others: the real estate.

Unlike stocks, currencies and commodities, the real estate market is based on a reverse investment rule. To invest in stocks traders usually think to save money before investing. As for the real estate, the investors buys soon (borrowing money) to pay the debts later.

REAL ESTATE vs FINANCIAL ASSETS

Compared to financial assets, real estate offers a safer leverage. Historically, real estate has also been an excellent hedge against inflation, as well as protection against the dollar’s decline.

Despite the ups and downs of the markets, buying shares and keeping them for long periods of time, it could represent the best way to wealth. A stock of high quality shares will not only profit every year, but their dividend will increase. It will also be much easier to diversify by investing in stocks, through some brokers that allow you to invest a minimum monthly sum. The important thing is always choosing an authorized broker and you can do so by choosing the best brokers on soloforex.com website.

On the other hand, people are psychologically more open to investing in real estate because it is a tangible good that can be seen and physically controlled. Also, it will be even harder to be defrauded in real estate because of the inspection process that takes place before selling a property.

IS REAL ESTATE MORE PROFITABLE?

The general perception is that there is a significantly higher number of people who have managed to significantly increase their assets by investing in real estate rather than with the usual financial assets. This perception is the result of the different approach we use to invest in real estate compared to the one followed to invest in stocks, currencies and commodities.

There are different reasons why people think that investing in real estate brings more gains than investing in financial markets.

The first reason is the mindset that we tends to allocate large amounts of money to buy houses. Most people think that it is quite reasonable to invest 200% of their assets in buying a single property. While they are risk averse to the thought of spend $1000 on the EUR / USD currency pair.

The second reason is that people tend to invest in real estate with a very long time horizon. On the contrary, the majority of investors in financial assets tend to consider a “long-term” period not more than twelve months.

The third reason is that investors tend to devote more time to plan a real estate investment than in financial assets. In the case of a reduced income, the installment of a mortgage is always honored. Most traders, on the other hand, tended to dedicate little time and effort to planning and to immediately suspend payments to the first hurdle.

If you are considering buying a property it is good to start getting into the perspective that brick is just one of the many ways to invest. This is a fairly simple concept even ifwe tend to give to the house a special status. In fact, the real estate investments, except the first home, should be treated like any other financial assets.