Stocks vs. Real Estate Investing

For the past many years, real estate has provided a hefty return for those who got involved early enough. Real estate has appreciated 12.4% annually between 2001 and 2006, according to the S&P/Case-Shiller U.S. Home Price index. That beats out stock prices, which gained only 4.3% a year as measured by the S&P 500.

So which contender is the superior long-term bet today? CNN Money has an interesting article talking about this and Robert Shiller, author of Irrational Exuberance seems to think the real estate boom is over.

You can also read some interesting information about the 100 biggest real estate markets. McAllen, Texas is predicted to have the highest return thru the next year at 9.8%. Now this data is for single family homes and doesn’t affect the multi-family home investor. I only purchase multi-family homes (apartments, duplexes, fourplexes) since they are a safer investment. Less volatility and one vacancy doesn’t mean 100% vacancy.

6 thoughts on “Stocks vs. Real Estate Investing”

  1. Is Investing in REITs (real estate investment trusts) a Good Idea?

    Thanks for the post, useful and something most folks like us who invest in both keep thinking about all the time…

    I have a question about REITs

    Though I do a fair amount of reading of the real estate market, I must admit that I don’t keep in touch with domains such as real estate investment trusts. I understand the REITs (as they are called) could be a very useful addition to one’s portfolio, especially for those folks who wish to invest in real estate but are not actually keen on owning a house or real estate! What are the views of the members?

    I also read that due to favorable tax laws, REITs generally pay large dividends which appeal to investors looking for income and stability. And because REITs generally do not own single-family homes, they usually do not move in lockstep with the rest of the housing market or the stock market, and so if owns REITs and S&P stocks, when one zigs while the other zags, making the portfolio more balanced.

    Now the above is what I read…it will be quite useful to know the feedback from you and other visitors if they have had experience investing in REITs..

    Thanks for your time

    NS from RealPedia – The Real Estate Directory & WWW Encyclopedia @ http://www.billdoll.com/dir/r/biz/re/re.html

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  3. I think investing in real estate is a better bet then in stocks. You can learn the basics of investing in real estate and make money. You can learn the basics of investing in stocks and quickly lose money.

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