Real Estate Versus Stocks: Which Is The Right Investment To Make During The Pandemic
Many investors who look to invest often turn to the stock markets for short-term and long-term gains. However, many people do not know that when compared to stocks, real estate is a far better and lucrative opportunity for investments.
People invest in stocks or any other investments for a number of reasons-
- They want to create their retirement funds
- Pay off college debts or loans on houses
- Open up a second source of income
- Secure Tax Breaks from the government
- Budget-based investments
While there may be other benefits, the above-mentioned ones are the most basic ones. In this article, we are going to look at which is a better investment for investors- real estate or stocks.
Investing during the COVID-19 Pandemic- What you should know
We are not living under normal times. The Coronavirus pandemic has altered the world’s financial systems resulting in recessions and contractions. From an investment standpoint, this has resulted in many investment avenues becoming redundant. On the other hand, it has also resulted in many new opportunities to come up to woo investors.
Many experts point out that investors should look to invest for the long-term, rather than seek short-term gains. This means that stock opportunities have become unviable in the face of the gloomy world economy and stock markets.
While small investors are looking to cut their losses, big investors are on an aggressive expansionist mode. They are looking to get assets at far lower prices that in a pre-COVID era. Hence, for some, the pandemic is offering greater opportunities for investments.
Is Real Estate the right Investment Option for you during the Pandemic?
Let us be clear- investing in real estate or stocks is a personal choice. Many people have an affinity for stocks, while others prefer investing in real estate.
Many expert point out that the pandemic has resulted in a lot of off market properties coming on to the market and offering lucrative opportunities. This means that property process are plummeting in the face of low demand and great supply. This is especially true in developed economies, where real estate is a major driver of the economy.
If you compare the returns from both these investment opportunities during the pandemic, you will realise that real estate is outperforming stocks in a major way.
The impetus being provided by governments in the sector is also a reason, why experts predict that the real estate sector is going to bounce back much stronger than before.
Do Stocks not matter anymore as an Investment opportunity?
As we all know, almost all the major economies all over the world saw record contraction. With GDP hitting double-digit integers, the brunt of the losses were calculated in the stock markets all over the world.
Smaller companies who were showing potential have been the biggest sufferers of the stock market crash. Bigger companies like Amazon, Microsoft and others, who were connected to technology and digital platforms saw a rise in their stock prices.
In other words, it was only the tech stocks, which were able to weather the storm of the pandemic successfully. This is one major reason why many investors started moving their investments from the stock market, and parking them in real estate.
Investors, especially the ones looking for long-term investment opportunities feel the low prices and the tax break benefits offered by real estate makes it a far better option during the pandemic.
The Final Word
People who suggest that real estate might not be a good option point out that flipping during the pandemic is not something, which should be considered. However, at the end of the day, it is important to note that it all comes down to personal preference. Investors should first think about their interest areas and then proceed accordingly.