Skip to content

Naples, Bonita Springs, Marco Island, and Sanibel/Captiva | 239-285-1086

Benefits of Real Estate Investment vs. Stocks and Bonds

graphic dollar sign of houses, buildings, keysRISMEDIA, Saturday, November 30, 2013

As the economic recovery continues to build, Americans are again able to consume and invest; and with recent reports from the U.S. Census Bureau noting 34 percent of American households are rental units, investors are taking notice and rushing to reap benefits of placing investment funds in single- and multi-unit residential property.

“Investor demand for single family properties remains strong,” says Kirk McGary, CEO of Real Property Management, citing a recent study from Zelman & Associates that found investor demand for residential properties ranking at 60.9 on a scale of 0-100. “Trends like this in the housing market have created significant demand for property management companies like ours, as investors choose to put their money in real estate as opposed to the alternatives.”

Although there are many investment options available, real estate vehicles offer the ability to finance a portion of the purchase price to leverage the initial investment to control an asset valued much higher – unlike stocks, bonds and CDs. With lower interest rates available, a small increase in the value of a leveraged property investment can carry a greater return than an unleveraged investment — approximately 12 percent gross according to the same study by Zelman & Associates.

Investing in real estate also offers tax benefits where earnings from investments in CDs, bonds and stocks are taxed. By making deductions from the profit on mortgage interest, cost of property repairs and depreciation, property owners are writing off depreciation of an asset that is actually ascending providing yearly benefits to a long-term investment.

Most importantly, ownership of property improves cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional homeownership costs.

Being able to minimize tenant turnover through timely and concise management reflects on the bottom line, maximizing the return on investment overtime.

More About Buying A Home:
Naples Makes Top 10 Turnaround List
That boom you heard is Southwest Florida building industry: It’s back

Published inBuying a Home
Copyright © 2012-2023 David Critzer, REALTOR®. All rights reserved.
Webmaster: Patricia Gill