Real Estate Investments vs. Stock Investments?

I have to do a report on a finance topic and I've chose this, but I need reasons as to why I'm interested in it and why others should be.

Also what main points should I put in this report?

A person should do both.

They can buy a residential property for 10-15% less today than they could a year ago. Intrest rates are about 1% lower as well. This would save the buyer about $200 per month on a $200,000 30 year mortgage.

They should buy real estate and invest the difference in stock. They build equity and gain value in a safe long term real estate investment and have the aility to invest in stocks. Thus benefiting from both opportunities.

there are many areas of real estate investing. I do three types. 1. I buy houses, fix and flip, 2. I buy and hold real estate as rentals. 3. I loan people money on their real estate. There are advantages and disadvantages to all three. 1. fixing and flipping, no guar. of a profit, although I have been lucky in a hot market. 2. The headaches associated with tenants, toilets and I can't remember the third t. but I have had my properties appreciate very nicely. 3. I have lent the money out that I made by flipping. I make a very nice interest rate on this money because I lend it at from 9 to 12 percent. I am making a very nice rate of return with no headaches of the tenants and toilets and without the back breaking work of flipping properties. I see it as a good future way to invest as I get out of real property and get into notes as I get older and don't want to be involved directly in real estate. The biggest reason I see for holding property to my death is that I can pass it on to my children at a stepped up basis. Now stocks are a little trickier. Historically real estate has only ever gone up, but of course as you know we are having a downward push in real estate not previously known in history in this proportion. can it last? as each new generation marries and needs housing it seems unrealistic that there won't be continued demand for housing, but the jobs that americans are getting working at macdonalds are not going to pay for a 500,000.00 house. Stocks are a crapshoot. That market is more erratic.

Here are your best answer http://89903.com

I believe you need to be diversified and should not put all of your money into any one vehicle. That said I personally am heavily invested in real estate because I love the powerful ways you can make money in real estate. Essentially, you can make money through any or all of these ways:

* Property appreciation
* Cash flow
* Other people's money paying your mortgage.


Here's a simple example: Pretend you find a desirable property for $100,000, and you buy it for 25% down ($25,000).

1) Appreciation: Property goes up in value by 5% in year 1. It's now worth $105,000. Return after one year is 5000/25000 = 20% on your $25,000 investment in the first year!

2) Cash flow: Rent each month is $1000. Your mortgage, insurance, taxes and miscellaneous expenses are $900/month. Income minus expenses = $100/month. 12 months x $100 = $1200/year income.

Add that to the appreciation and you have made 6200/25000 = 25% in the first year through appreciation and cash flow.

3) Other people's money paying down your mortgage: Assuming you have a mortgage at a 5% fixed rate, at the end of the first year you will owe $73,440 on your $75,000 mortgage. You have now built an additional $1560 equity into the property ($75,000 - $73,440 = $1560).

Your return including appreciation, cash flow and reduced principal give you a first year return of 7760/25000 = 31%.

You don't need all three elements to be present to make money which makes it more flexible. PLUS, I like the element of control I have over real estate vs. stocks. I have no say in what a board of directors does for their company, but I can control who manages my property, what tenants I put in it, and what improvements I make.