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Is Real Estate Safer than the Stock Market?

It’s not hard to see why we should plan for the future. One quick check on your news feed will give you a dozen reasons to question what tomorrow will look like. It may even send you into a planning and brainstorming tailspin as you try to figure out the best and safest way to hedge your bets for the future. Let me help. Let’s talk about the safety and reliability of Real Estate Investing.

When people think about investing, they immediately think about those crazy pictures of stock traders in NYC. Investing in the stock market is one way to put your money to work and set up some financial security. The other way is to invest in real estate. These are two very different options. In the case of stocks, you are investing in one or several companies, and essentially betting on how good their idea is and how well they’re delivering that idea to their customers. In the case of real estate, you purchase interest in a physical piece of property and betting on the rental income it will provide you with.

Knowing the differences between these two investment strategies is crucial, so let’s take a deeper dive.

“It is imperative to know the difference between the two concepts if at all you can understand which is safer”. – Watkins

1) Liquidity

When investing in the stock market by going for the shares offered by public companies on a big stock exchange, your investment becomes liquid. This is because shares are purchased and sold instantaneously. Broker commissions (fees associated with transactions) due to the sale of these shares are very small for individual shares. []Conversely, when investing in real estate, it is not instantaneous and may take some time before you are able to sell. The broker is also due a higher commission thus making real estate a greener pasture.

Real estate also stands out because it is a futuristic investment and people will always consider it as a long-term investment lest they fail to reap all its benefits. Stocks can be traded any time but real estate can last and those who want to succeed in this field should see it as a long-term project.

The stock market is a good place to invest for the long term but only if it is with a trusted company, which has a higher promise to achieve the desired returns through dividends or by means of stock price appreciation. The stock market also holds the advantage of instant liquidity and availability, a reason why stock prices tend to rise.

2) Time Investment

Real estate investing comes with certain responsibilities such as maintenance, payment of taxes and insurance as well as the recurrent bills due to utilities like electricity and water. There is also the hassle of finding good tenants that will make for a peaceful stay. The eviction of bad tenants, dealing with their complaints makes the whole endeavor to invest in real estate very time-intensive. These concerns can be offset by hiring a manager that will directly deal with the tenants on your behalf. The concern of doing this is that it can cut down on your profits. Investing in the stock market on the other hand does not require this sort of time investment.

3) Volatility

Stocks vary in price for a lot of different reasons, therefore often considered volatile. As such, they are out of the investors’ control. In certain instances, the price of your shares can go down in a very shocking way often in a period of between 5 and 10 years. Conversely, when it comes to real estate, the prices are often stable in the sense that though the prices for real estate can also drop, it is very rare to witness such a scenario for instance twice every 50 years. It therefore stands safer.

4) Tangibility

Land and buildings that are properly maintained in a well-situated location bring out the value in real estate. As such, they are more real as compared to the stock market. While real estate prices certainly can fluctuate, this will never disrupt the value associated with real estate. Conversely, for the stocks, they can go to extremes where they hold no value. In real estate, you will always have a piece of physical property with some value.

Real estate is a tangible venture that holds promise of appreciation and depreciation based on the supply and demand curves of that area. []Housing for instance, is one real estate venture that is considered scarce and there is multiple housing in existence at any given time.

5) Initial Cost

The big selling point to the stock market is the requires way less cash than it does to invest in the real estate industry. With just a few hundred dollars, one can successfully go into stock trading but it takes much more to venture into real estate.

6) Autonomy

[]Depending on the investors’ choice that if they buy into stocks, they cannot get control over the company they buy into. If the stocks start depreciating for when it comes to prices then the investors have a reason to panic.*

Obviously these are two very different investment strategies, and should be thought through carefully. It’s worth noting that these two strategies can be used in conjunction. The liquidity and low entry cost makes the stock market a good way to save up the cash necessary to get you into the real estate market.

“Possessing the cash to purchase a property which will provide shelter while at the same time serve as a forced savings account or alternatively units of as rental income property. Alternatively, with a small amount of money , secure stock that will aid in setting up cash to a level where as an investor, you will have enough to acquire property.” – Ryan Boykin

Having witnessed a thriving real estate market for over two decades and having gone through the digitized experiences of investors in both fields, it comes out very clearly that real estate is ultimately a much safer ground to invest in than the stocks. However, it is important to note that it all depends on the market that the you choose.



  • Should You Invest in Real Estate or Stocks –
  • Reasons to invest in Real Estate-
  • Photo by Karl Reif – The Kiss
  • Photo by Chris Liverani on Unsplash

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Bob Walton

Broker/Advisor/Realtor® WHAT BOB DOES IN 20 WORDS OR LESS “I deliver quality below-market valued properties to investors who want to grow their RALEIGH AREA investment portfolios… on demand.” Bob allows you to focus on expanding your portfolio INSTEAD of searching & negotiating. Bob understands that buying or selling a home, business space, land development or home flip opportunity is more than just a transaction: it’s a life-changing experience. That’s his team of highly-seasoned real estate professionals is dedicated to providing exceptional, personalized service for all of our clients.

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