Condos or Stocks?
BUILDING WEALTH: STOCKS VS REAL ESTATE
Have you ever though that there might be a better way to build your wealth? We break it down for you on where to invest your hard earned cash, stocks or real estate.
STOCKS VS REAL ESTATE
It has never been easy to decide where you should invest your capital. There are many options and the stock market has always been a populare place to invest & grow. But, have you ever thought that there might be a better way to build serious wealth?
Let’s start with something simple: Do you own a home or condo? If you do, I encourage you to compare what you have already earned in easy safe equity on your property versus what you may have earned with a stock over the same period of time. In general people are starting to realize that investing in the stock market is earning you pennies in comparison to the dollars from your Toronto real estate investments.
INVESTING IN THE STOCK MARKET IS RISKY BUSINESS
We all know the saying: the bigger the risk, the bigger the reward, but with stock investments, you forgo any control you have over your money.
When you purchase stocks, you are buying a very small portion of a publicly traded company and in return, you are allowing the success or failure of that company to determine what happens to your money. While there are lots of ways to try and make smart choices in the stock market, truth is no one can know for certain when something could take a turn for the worse.
What if one of the companies you have invested in gets a new CEO and that news causes their stock to plummet? What if your shares of suddenly takes a dramatic dive due to an unforeseen controversy in the news? Fact is, these events are things you have cannot possibly ever control over. The stock market is inherently volatile and when you invest your money in the stock market, you are exposing yourself to a lot of uncontrollable risks.
SAFETY FIRST INVEST IN REAL ESTATE
Real estate has awlways been seen as a very safe choice to invest in. A Downtown Toronto Condo is a tangible asset over which you have ultimate control. You can see it, drive by it, live in it or rent it out. Also you do not have to worry about your house appearing on social media making a fool of itself and causing its value to go down.
The real estate market in Downtown Toronto has proven over time to produce very steady growth and be more stable than the stock market. While economic and political factors can and do influence the market, it is rare to see property values drop significantly for the same reasons. It is important to add and to remember that investing in real estate is usually for the long term. As we all can see Toronto Real Estate is not getting less expensive over time.
The catch is in real estate in order to start investing you need to be prepared to invest money up front, maybe more than you would have to before starting in the stock market. However, if you have the capital, your dollar will go further when invested in real estate. Real estate leverages your money in a way that the stock market just cannot compete with.
Real estate has the ability to earn you more then the stock market can because you are investing in a much larger asset. Real estate values do not increase unilaterally. You still need to make educated investment choices. That is why it’s important to have our expertise at your disposale. We knows how to navigate the market properly and can help guide you to maximize your return.
Shall we compare? Let us look at this:
An intelligent intial move it to always work with us as we are experienced Realtors with trusted and tested experience. We help you to ensure that you are investing in an location that will put you on the path to achieve the best financial results.
When buying a property as an investment, it is important to not make emotional decisions, and working with our experianced Realtors grants you advantages, such as access to their skills in reading the market, recognizing what neighbourhoods are on the rise, and understanding which properties will earn you the top dollar.
KEYS TO SUCCESS ENSURE YOU ARE FULLY FUNDED
Try not to over leverage yourself. A great way to keep your investment safe in real estate is to ensure you are fully funded with a suitable type of financing. When you buy a condo suite to live in you are actually buying shares in a condo corporation similare to the stock market. If you do not have the resources to hold on to them, you may be exposing yourself to an element of risk. Make sure you have all the funds you need to hold on to that asset without needing to sell.
In addition to your monthly real estate payments such as mortgage, property tax, and maintenance fees, it is important to create a safety net. Financially speaking it is a good idea to have a small amount of capital in reserve should you have to pay any unexpected condo fees.
HOLD ON TO YOUR ASSET
Put yourself in a position to sell only when you choose to. Real estate is an investment, and you should never be making an investment with the assumption of having to sell it early. The only reason you should sell your property is if the profit from the sale is enough that the returns you gain from reinvesting it outweigh the returns from keeping the original asset.
CONSIDER THIS FIRST
If it were easy, everyone would do it. Some people might argue that investing in real estate comes with more responsibilities than stocks and bonds, but the truth is, whether you are investing in real estate or the stock market, there will always be more to investing strategically than simply putting down the money.
Investing in the stock market, requires a lot of research on companies, market trends, and keeping on top of them or your financial advisor to ensure your money is safe and continues to grow.
Investing in real estate does have responsibilities as well. If you invest in pre-construction developments, you can put your money down, build equity over the 3 or 4 year construvtion period, and eventually rent them out. Regardless of your investment approach, you are going to have to put some work towards growing your wealth & we are here to help.