Stock Vs. Real Estate: Which is a Better for Small Investors

[Mika]

Generally speaking, small investors cannot invest in the real estate market because they need a lot of money. For example, if you are buying $300K home, you might have to pay a 20-40 percent down payment, which is a lot of money. However, when you want to invest in the stock market, you can do with even small funds. But if you can manage a down payment, do you think you will profit more from real estate investment or from the stock market?

The answer depends on your risk tolerance level. When you invest in real estate, you can start collecting rental income, which you can use to pay your mortgage fees. If the market improves, you can even flip your property to make a lot of money. In order to profit from the stock market, you need to invest for the long term. However, you can benefit from real estate even for a short duration because you can start earning rental income right away.

 

[Ithedicious]

The point is that I don't have an idea about the stock market all that but I have some little understanding about real estate because real estate are being done mostly on daily basis in which people buy properties for buildings or for reselling purposes.

The stock market may even present a better opportunity for people to invest with low capital than the real estate because real estate in some certain location are so expensive that you can't even invest with less than 5,000 dollars over here..

At the same time there are some stock investment that can be done even with as low as $100 depending on its future potential.

If I have opportunity , real estate investment would have been the best for me because the risk of losing your money is not high as long as you have carried out proper research concerning any investment you have done then everything will work out perfectly.

 

[niche]

Though few people make a loss when they invest in real estate , managing real estate is very time consuming, especially if the property is far away from the place where the person is residing. Also those who are not well connected find that powerful politicians and their associates are always trying to grab their property.
If the stock market is well regulated, it is usually better to invest in stocks, especially during a downturn , since less effort is required to manage the stocks, no time is wasted visiting the property repeatedly. However some investors may make a loss.

 

[Sotherefore]

Both of them can actually generate money to anyone who is investing in it , but considering the most important one for people who do not have money , well there are so many things to be put into consideration because every form of investment will have its own risk in one way or the other. Stock is an investment that can be start up with $100 and above but I don't really know about the profitability of this investment . I believe it depends on the stock project you are investing as the market may be volatile..

Real estate investment as I understand is a very profitable Investment that can be done by anyone . It is an investment that should be start up with not less than $5000 if you are interested to make reasonable profit after a period of time. It is a sure way of making money depending on the type of properties you are investing on.

 

[arunima25]

Actually that was the first question or rather a doubt that crossed my mind as I read the title of the topic. Small investors can not afford real estate unless they look out for huge loans and that might not be wise. Unless the real estate is for personal consumption like a house, it's not a wise decision to invest there with a huge loan as your liability.
Stock can be an option with small savings too. So, it would be a better option for any beginners or small investors. Now, small investors can be of two categories here. One, who don't have enough money or savings to invest. Second category will be those who have enough money but they want to invest a little in stocks as they want to have a diverse financial portfolio and not only focus on stock.Irrespective of the category, anh investor would aim for profit. So, a bit of research and study of the market would be helpful. Risk appetite is needed for stocks as despite all your preparation and research, you can not guarantee no loss investment. The ones belonging to category one can not havea huge risk appetite even if they want to.