Real Estate vs. Stocks: Which Is the Better Investment?

Should you invest in real estate or stocks? Both investments have pros and cons you need to understand.
Kevin VoigtMay 2, 2021

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To grow your wealth, which is the better strategy: Investing in real estate or building a portfolio of stocks?

Many Americans do a bit of both: 65% of U.S. households are owner-occupied, according to the U.S. Census Bureau, and the Bureau of Labor Statistics says 55% of American workers participate in an employer retirement plan. If you’re among them, you likely have some exposure to the stock market.

But if you’re looking to double-down on either type of investment — or you’re new to investing and trying to pick between the two —  it’s wise to know the advantages and disadvantages of each strategy.

It’s also important to know that you don’t have to choose. You can purchase shares in real estate investments without the headaches of actually buying, managing and selling properties.

Traditional real estate investments can be broken down into two broad categories: residential properties —  like your home, rental properties or to buy, then resell for a profit — and commercial properties, such as apartment complexes, office buildings and strip malls.

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Buying shares of stock has significant pros — and some important cons — to remember before you take the plunge.

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Don’t feel like flipping homes or building a rental property empire? Fortunately, there is an easier option:, or REITs.

REITs are companies that own (and often operate) income-producing real estate, such as apartments, warehouses, offices, malls and hotels. The most reliable REITs have a strong track record for paying large and growing dividends. Many offer publicly traded REITs and REIT mutual funds and ETFs.

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