Real Estate vs. Stocks The benefit of having real-estate assets in your portfolio is evident from historical returns of such assets compared to other capital-gain instruments such as stocks, bonds or foreign equities. Stocks: When you buy shares of stock, you are buying a piece of a company. Whether that company makes something, sells something, creates applications or software or provides a service, by owning a share, you are entitled to a cut of the profit, if any, for every share you own. An investment in stocks, bonds or mutual funds will buy the equivalent amount of equities. In other words, $50,000 buys $50,000 of equities; With real estate: When you invest or buy real estate, you are buying physical land or property. Real estate will bring a higher and consistent yield, long-term investment than other options like mutual funds, stocks, RRSPs, etc. Other advantages: - A leveraged real-estate investment buys real estate worth many times the down payment;
- A property worth $100,000 can be purchased with $25,000 down - or less if it is CMHC insured;
- You benefit from growth in the property’s total value, not just the original investment, which multiplies your returns;
- The principal of the mortgage is paid down by your tenant who essentially buys the investment for you.
Income Streams from Real Estate Once the principal on your investment is paid off, and even well before it is paid off in its entirety, the monthly rental payments from your tenant become monthly income for you. •Rent generally doubles in Canada every 15 years. •Owning 5, 6 properties or more can generate a substantial monthly income that will continue to increase with every passing year. •The property is managed for you - there are no property management hassles…a major reason why many people shy away from real-estate investments. Barrie Real Estate Market Reports - coming soon |